On Thursday, Facebook-parent Meta Platforms (META.O) announced its first-ever bond offering, coming at a time when the social media company is making massive investments to fund its metaverse projects.
The size of the offering was not disclosed, but Meta stated that the proceeds would be used for capital expenditures, share repurchases, acquisitions, or investments. Meta is the only high-flying megacap technology company that does not have any debt on its books.
The company’s free cash flow has been dwindling as it pursues its metaverse plans, prompting a name change from Facebook to Meta Platforms last year.
Meta had $4.45 billion in free cash flow in the second quarter ended June 30, compared to $8.51 billion a year ago and $8.53 billion in the previous quarter. The company also reported a drop in quarterly revenue for the first-time last week.
On a post-earnings conference call, Chief Financial Officer Dave Wehner stated that the company had a “substantial amount” in its buyback program and plans to continue with buybacks as part of its capital allocation strategy. Moody’s assigned the company an A1 rating, while S&P assigned it an AA- rating with a stable outlook.
To read our blog on “Success of metaverse branding is set on by its ultimate purpose,” click here
