Meta Announces Dividend Payout from Which Zuckerberg Will Earn $700 Million, Stock Price Rises

Zuckerberg’s Meta has exceeded Wall Street’s expectations for the fourth quarter by reporting $40.1 billion in revenue and earnings of $5.33 per share. Additionally, the company announced the payment of its first dividend to investors amounting to $0.50 per share (50 cents). Following this news, Meta’s shares rose by 12 percent.

The dividend payout will also benefit the co-founder and CEO of Meta, who is the main shareholder holding 13 percent of the shares or 350 million shares of Meta, meaning Zuckerberg will receive $175 million each quarter, with payments expected to start in March of this year. This means that the owner of Meta will earn $700 million solely from dividends.

According to Bloomberg’s Billionaires Index, Zuckerberg is currently the fifth richest person in the world with a net worth of $142 billion, and given his strong start to 2024, he could soon rise a few places higher on the list of the world’s wealthiest individuals. His wealth has increased by 11.2 percent in the first two months of this year, thanks to the continuous rise in Meta’s stock.

For the entire year, Meta’s revenues increased by 16 percent compared to the previous year, while profits grew by 63 percent during the same period to $39 billion.

Year of Efficiency

Meta’s strong performance came after the company’s ‘year of efficiency’ in 2023, when Meta laid off thousands of employees. Last year, Meta spent $3.5 billion on ‘self-reduction’. Of that, $2.5 billion came from ‘consolidation of facilities’ — closing and merging offices, and another billion dollars on ‘severance and other personnel costs’, i.e., on employee layoffs. The company now operates with 67,300 employees, a staggering 22 percent decrease compared to last year.

All of this means that Meta’s profit margins are much, much better. While its revenues increased by 16 percent (a figure that most large tech companies would be very satisfied with these days), its operating income rose by 62 percent, and profit by 69 percent.

The Collapse of the Metaverse

Although the push for the metaverse has famously failed, Mark continues to burn money on virtual reality, as last year, the ‘Reality Labs’ department that oversees this lost as much as $16.1 billion in 2023, while that loss in 2022 was $13.7 billion. These metaverse losses continue to grow. In the last quarter of 2023, Meta lost an additional $4.6 billion on or due to the metaverse.

However, these losses clearly do not overly concern the owner of Meta, who told investors that Reality Labs expects a significant increase in operating losses due to ongoing efforts in developing augmented and virtual reality products. Nevertheless, investors remained indifferent to these announcements due to the stock being at an all-time high.