Meta’s $50 Billion Buyback — Is It Good? Bad? Redditors Appear Divided In Their Opinion (UPDATED)

Editor’s note: This story has been updated to remove an offensive Reddit username. Recently, a Redditor going by the username u/evilmonk234 sparked a discussion on Meta Platforms Inc (NASDAQ:META), the parent company of Facebook, about its announced $50 billion buyback. The question at the center of the debate: Is it good or bad?

Been investing in stocks for a year now, is Zuck issuing a 50B buy back for META good or bad? byu/evilmonk234 instocks

Related: Unveiling Meta’s Game-Changing Dividend And A $50 Billion Surprise – How This Tech Titan is Redefining Shareholder Value

Redditors Appear Divided In Their Opinion

The responses from fellow Redditors provide a range of perspectives on Meta’s $50 billion buyback:

Inverse Logic: User gizamo cautions against assuming a direct correlation between large buybacks and stock price increases. Drawing a parallel with a past example, they mention that Micron Technology Inc (NASDAQ:MU) had a significant buyback that didn’t necessarily lead to a positive outcome for the stock.
Bullish Outlook: According to Diamondhands4dagainz, a buyback is always bullish, akin to a dividend. The logic here is that reducing the number of shares in circulation raises the average price per share, potentially benefiting existing shareholders.
Valuation Matters: Throwaway_Molasses emphasizes the importance of the stock’s valuation. A buyback is seen as a positive move when the stock is undervalued but can be considered bearish and a poor use of cash when the stock is overvalued.
Timing and Insider Trading: m264 suggests that share buybacks at the peak of overvaluation might be a tactic to maintain short-term stock momentum, especially if insiders plan to sell. This viewpoint implies that timing is a critical factor in assessing the impact of buybacks.
Already Priced In: badtradesguynumber2 argues that the $50 billion buyback and the dividend might already be factored into the stock price. This perspective aligns with the efficient market hypothesis, suggesting that all publicly available information is reflected in current stock prices.
Warren Buffett’s Wisdom: CanYouPleaseChill quotes Warren Buffett to stress the importance of price in repurchase decisions. The legendary investor warns against buying at any price without considering intrinsic value,…