Meta Platforms made history on Friday by gaining $196 billion in stock market value, marking the largest one-day increase by any company in Wall Street’s annals, Reuters reported.
This monumental surge came after Meta, the parent company of Facebook, announced its inaugural dividend payout and posted impressive financial results.
Meta‘s stock (META.O) soared by 20.3% during the trading session, marking its most significant one-day percentage gain in a year and the third largest since its debut on Wall Street in 2012.
As a result, the company’s market capitalization now stands at an astounding $1.22 trillion.
In preparation for Facebook’s 20th anniversary, Meta authorized an additional $50 billion in share repurchases and revealed that its quarterly dividend would be 50 cents per share.
This dividend move is uncommon for technology giants but follows in the footsteps of other tech heavyweights like Apple, Microsoft, and Nvidia.
While some view the dividend as a symbolic gesture, it reflects Meta’s intent to enhance its corporate image and be taken more seriously in the market.
Investment analyst Dan Coatsworth at AJ Bell emphasized the symbolic nature of the dividend.
This unprecedented increase in Meta’s market value surpassed the prior record held by Amazon, which had seen its market value surge by $190 billion on February 4, 2022, following stellar quarterly results.
Just one day before this remarkable gain, Meta experienced the largest single-day loss in U.S. stock market history, shedding over $200 billion in value after issuing a disappointing forecast.
Meta’s dividend plan will notably benefit CEO Mark Zuckerberg, who owns approximately 350 million Meta Class A and Class B shares, potentially earning him about $175 million every quarter.
Meta’s success is also attributed to the optimism surrounding artificial intelligence, which contributed to a 24% rally in the S&P 500 last year.
Meta, along with Nvidia, Microsoft, and Broadcom, has recently reached record-high stock prices. With Friday’s gain, Meta has surged by 35% in 2024.
The company’s fourth-quarter results highlighted strong ad sales and a rebound in user growth, with a remarkable 25% increase in revenue.
Its current-quarter revenue forecast also exceeded analyst expectations, driven by a significant 8% reduction in costs and expenses achieved by eliminating more than 21,000 jobs since late 2022. As a result, Meta tripled its net income to a staggering $14.02 billion.
Although Meta’s dividend may seem modest in comparison to other companies, it could make the stock more attractive to a broader range of investors, including dividend-focused exchange-traded funds (ETFs).
Meta’s dividend yield currently stands at around 0.4%, while Apple’s is about 0.5%, Microsoft’s is 0.7%, and Nvidia’s is under 0.1%.
This strategic move by Meta could potentially attract investors seeking steady income, as ETFs focused on U.S. dividend payers already manage over $400 billion in assets.
Over the past decade, Meta has invested heavily in expanding its computing capacity to support generative AI products across its platforms and hardware devices like its Ray-Ban smart glasses.