Meta’s $10B bond sale
It’s happening, Meta is selling $10B in corporate bonds. Reportedly, S&P Global Ratings has assigned Meta a AA- investment-grade rating and the bonds have been issued with very favorable terms. Fun fact: Meta has been one of just 18 companies in the S&P 500 without debt to this point.

Proceeds from the sale can be used for capital expenditures, stock buybacks, acquisitions and other investments. Since Q3 2021 there has been a significant uptick in buybacks. Unfortunately, until January 2022, these have been made with quite high prices, not the very best capital allocation.

But the situation has changed. The stock is down significantly and IMO it’s a great opportunity for Meta to buy back stock now with low yield debt. Meta has been using cash to repurchase stock, including $5.1B in the Q2, and had $24.3B available for buybacks as of June 30.

If you are a shareholder, it would be advantageous for the stock to stay down for a while longer, so the company can buy back more cheap shares. With patience, this should yield great results in the long term.

Conor Mac's avatar
Whats the rate % on the bonds?
Michael Szumielewski's avatar
@investmenttalk It's a private listing, so no public figures, but reportedly, the longest portion of the offering, a 40Y security, yields 1.65 percentage points above Treasuries. Which is nice.
Conor Mac's avatar
@caridinacapital 👀 damn, not terrible
Eric Messenger's avatar
It’s one of my top three positions and I will continue adding aggressively as long as the valuation remains at the absurd levels they are at right now. Only company I have more faith in is Google.