Meta Raise $10B in Debt for the 1st Time Ever
News that $META is selling $10B in notes for the first time ever. I suspect this will be for buybacks, M&A, and your typical CapEx.
Whilst Meta does have ample cash on hand, having ZERO debt for a company as large as Meta could be construed as inefficient. Plus, ten billion is hardly overzealous.
48%Great - Buyback machine!
34%Meh - Not sure
16%Bad - Start of slippery slope
43 VotesPoll ended on: 08/05/22
I think it's good but should have done it even sooner when rates were lower. It's similar to when they did the big buybacks in Q4 2021. Could have used that money now with the stock being down substantially, here the same thing could be said. Why didn't you raise debt sooner in a record low interest rate environment.
This is a good move - although executed too late in my opinion. I'm not a bond guy but I can't imagine issuers are all too excited about the margin compression. That said, I think the bazooka is warranted at this valuation.
Feels like a smart move but why didn't they take advantage of lower interest rates? Same with Google?
I believe $EA got a 2032 bond at less than a 3% interest rate (fixed). Facebook and Google should have done $100 billion each imo
A year ago with rates at basically 0, I would have agreed. I doubt they got that now
Theoretically, having debt in the capital structure lowers the cost of capital and thus increases the value of Meta (future cashflows discounted at a lower rate).
We agree with the comment of @rihardjarc , but still it is a positive development.