Facebook owner, Meta Platforms is looking to raise $10 billion in its first ever bond offering, Reuters reported on Thursday. The tech giant will be using the funds for share buybacks and investments.
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The bonds on offer are those with maturities ranging from short-term to long-term, from five to 40 years. So far, $30 billion worth of orders have been made by investors, according to sources who spoke to Reuters, adding that the demand is skewed towards those with longer maturities.
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In recent history, Meta has been the only company able to keep debt off its books. By making a bond offering at a time when the US is fighting recession and investor concerns are piling, the social media behemoth might be able to build a traditional balance sheet.
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Meta had started working on these bond offerings a few months ago, according to the Reuters report. It looks like Meta recognised the signs in the market early on, given that during its second quarter earnings call the company reported a decline in revenue for the first time in the company’s history. It’s free cash flow went from $8.51 billion in the second quarter last year to $4.45 billion this year.
In recent months, the company has been pushing harder and harder to put short-form video content in the forefront as it capitalises on machine learning and artificial intelligence to create algorithms that direct users to content that it can monetize.
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Meta’s properties Facebook and Instagram have both been threatened by the meteoric rise of the Chinese app TikTok. The short-form video app which lets users create videos ranging from 15 seconds to 10 minutes. Such has been the popularity of the app that it even surpassed Google as the most popular site in 2021.