Today Facebook (FB) released their Q3 2021 earnings report and there were quite a few things worth noting that they announced. Among all the key takeaways was the announcement that the company would be giving their buyback a $50 billion increase. The news comes bundled along with a rather tumultuous amount of what seems like bad news for the social media giant.
Facebook ($FB) Q3 2021 Earnings will be reported today around 4.05 PM ET. pic.twitter.com/VEjocODGtm— Shacknews (@shacknews) October 25, 2021
The following was noted in Facebook's own Q3 2021 earnings report:
This could be taken as an implication that the company is having trouble trying to figure out what to do with their capital. More likely though they may be engaging in financial engineering to keep their earnings growing by decreasing its number of outstanding shares. This would help give the appearance that the their EPS (earnings-per-share) were growing, when in fact it is an effect of the buyback. At the time of publishing this article, (FB) stock had been taking a dip in after hours trading, but the news of the buyback increase likely stopped the initial selloff.
The buyback program increasing its share repurchase coffers by a massive $50 billion came packaged with several other worrisome noteworthy points, such as Facebook's AR and VR departments losing roughly $10 billion in 2021 and Facebook missing their revenue targets overall. However, stats such as their MAU (monthly-active-users) and DAU (daily-active-users) still saw year-over-year increases.
Today's earnings report comes hot off the heels of several controversial news stories making the rounds, such as Apple having to threaten to pull Facebook and Instagram from their app store to stop the practice of slavery trade on their social platforms, and whistleblower Frances Haugen sharing details of the "Facebook Papers" with select reporters. What this buyback will end up meaning for Facebook in the long term has yet to be seen, but we'll be sure to keep you updated on the company's future.