The Meta group (Facebook, Instagram), in search of financing, will launch a loan for the first time in its history, a sign that the social media giant lacks funds to finance its ambitions in the short and long term.
Between 8 and 10 million dollars
The Californian group will issue bonds, according to a document that it filed on Thursday, August 4, with the SEC, the control body of the US stock market.
It does not indicate the amount of funds you wish to raise, nor the duration of the bonds.
According to the Bloomberg news agency, Meta would seek to obtain between 8 and 10 billion dollars. The sum would be divided into four loans, the longest of which would be for 40 years, with interest 1.8 percentage points higher than that of US Treasury bonds.
“A situation worse than three months ago”
Last week, Meta posted disappointing financial results: Its quarterly revenue fell for the first time in its history and its net income fell 36% year-on-year to $6.7 billion.
The social network, the world number two in advertising, is facing budget cuts by advertisers, due to the bad economic climate, and competition from other platforms such as TikTok, very popular among the youngest.
“The situation looks worse than it did three months ago,” Mark Zuckerberg recently acknowledged during a conference call with analysts.
Issuing bonds is a “good idea,” according to analyst Dan Ives of Wedbush Securities. “They should have done it a long time ago.”
“Focused on long-term investments”
Last fall, Facebook rebranded itself as Meta with the stated ambition of building the “metaverse,” a parallel universe accessible in augmented and virtual reality (AR and VR), billed as the future of the Internet.
But since early February, its share price has halved. More than $400 billion in market capitalization went up in smoke.
It also plans to reduce the pace of hiring, like many companies in the sector.
When asked, the group declined to comment on the bond issue.
On Wall Street, the stock, which closed up 1.05% on Thursday at $170.57, was down 0.16% in electronic trading after the close.
Source: BFM TV
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