Meta’s $40B war chest will be going to Wall Street

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Meta can't make any big acquisitions right now, as its $40 billion war chest starts going towards appeasing Wall Street investors

of the deal in February, the suit has put a bit of fear in the industry as it helps to forge a path to more cases against Big Tech. Since Meta just settled with the FTC for $5 billion in 2019 over a separate matter, it's not looking to poke the bear.

Instead, the cash that might have ordinarily gone towards those kinds of big deals might go straight back to investors, to help renew its appeal to Wall Street. "We see a possibility that Meta could initiate a small dividend to attract a new class of investors," said Zino.The moves to appease Wall Street might be well-timed, given the way that Wall Street has pressured Meta to cut costs, including via its major layoffs of the last several months. would be given the boot.

But investors successfully compelled Meta to pull back on that too, especially after seeing Meta's free cash flow peak at $38.4 billion in 2021 and then drop to $18.4 billion at the end of 2022. "Meta's revenue potential is likely to be most challenged among the mega cap tech names during uncertain macro times and competitive pressures," Zino wrote in a note to clients this week.

 

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