Did you see Meta “shot the lights out”, and the share rose 18% after hours?


Yes, I saw that the share price move, but I’m not sure about the lights

What do you mean?

Well revenue was down 4.5% – avg price per ad decreased by 22%
Costs increased 22%
So EBITDA fell 40%
And operating income fell 49%
EPS fell 52%

And to think some call this “quality” …

But that’s the GAAP operating income, I saw Adjusted operating income rose 9%

Well it’s called “Generally Accepted Accounting Principles” for a reason – Generally Accepted

So you can follow MAAP if you want


“Management Accepted Adjusted Profit”

But those who trusted GAAP over MAAP over the past two years, are licking fewer wounds

And remember Madoff used a form of MAAP showing +1% returns every month and that ended in tears – so “generally” better to go with the independent view

Besides, even using their calc which ignores $3bn of stock-based compensation, Free Cash Flow is down 58% over the past year, almost exactly in line with net income

Yes, but they’ve announced a $40bn buyback – that’s huge

Well, that’s using every $ of their cash and only 8% of a $480bn market cap

Besides, I doubt Jack is interviewing these guys for the next Market Wizards book..


In 2021 they spend $44.8bn buying 136m shares = $329 each
In the first 9 months of 2022 they spent $21bn buying 101m shares = $208

Meaning $66bn paying $278 per share vs the current share price of $153..

Oh there’s another company that liked MAAP and buybacks

In November 2021 they announced an acceleration of their 3yr $1bn buyback program and buying the remaining $400m in Q3 & Q4 – the market cap was only $2bn

Wow, that’s 20% of the shares

I know, the stock ripped, just like META..

The CEO said at the time “We’re not in it for the day by day, we’re in it for the long term,”

Amazing, and how has the “long term” panned out?

Oh it defaulted on some debt the other day

Could file for bankruptcy any day

Drained the business of cash
to juice the share price
to enrich management

is my cynical stance on things

Sorry, which company is this?

Bed, Bath & Beyond (Help) – I wrote a post 7mths ago

So please be careful of telegraphed buybacks, they aren’t the answer to long-term wealth creation

Unless you can take advantage of the move by cashing in some share options…