Facebook’s parent company Meta issued bonds with maturities ranging from five to 40 years.
Meta has made its first-ever bond market offering to raise more cash for its business.
According to a filing with the US Securities and Exchange Commission yesterday (4 August), the net proceeds from the offering will be used for general purposes, which may include capital expenditures, share buybacks, acquisitions or investments.
The only Big Tech company that has operated on the market without debt so far, Meta sold $10bn in the corporate bond deal yesterday, Bloomberg reported.
Offering bonds with maturities ranging from five to 40 years, the Facebook parent company received orders of more than $30bn from investors, a source told Bloomberg. Sources also told Reuters that demand skewed towards longer-term investments.
The move comes days after CEO Mark Zuckerberg reported the company’s first-ever quarterly revenue drop and gave an underwhelming forecast for the year ahead. The reason given for the decline was weak advertising demand driven by “broader macroeconomic uncertainty”.
It is likely that Meta now needs a cash boost to invest in undertakings such as building its concept of the metaverse and doubling-down on Reels to help its social media platforms compete with TikTok.
Sources told Reuters that Meta has been working on the bond offering for the last couple of months, waiting until after its latest earnings call to issue them.
Other tech giants such as Apple and Intel also issued bonds earlier this week, raising $5.5bn and $6bn respectively.
On Meta’s earnings call last week, Zuckerberg said that in light of the economic downturn and its impact on the ad business, Meta is planning to “steadily reduce headcount growth” over the next year.
“This is a period that demands more intensity, and I expect us to get more done with fewer resources,” he said.
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