Meta plans $7B bond issue • Hacker News Board

Re: Meta plans $7B bond issue

#11

Post by ramesh31 » Mon, May 01, 2023, 3:36 PM UTC

misterprime wrote: post #3

I know Facebook/Meta is huge and well established, but a 40 year bond seems like an eternity in the tech world. Is Meta that entrenched that people are this confident that they'll still be around in 40 years? Perhaps there's a lot more to their staying power and value than some web pages, apps, and VR hardware, but I'm not very aware of it. I did note in an article a couple weeks ago that they participate in groups t…

>I think I'm trying to state: "Aren't the bulk of Meta's offerings too susceptible to trends to garner the trust required for a 40 year bond?"

Meta has more cash on hand and revenue than most countries. They are an institution unto themselves at this point, regardless of the future success of any individual product.

Re: Meta plans $7B bond issue

#12

Post by rullelito » Mon, May 01, 2023, 3:36 PM UTC

devnull3 wrote: post #9

Meta has ~$40B as Cash-on-Hand [1]. Why does it need to raise this money via bonds? [1] https://companiesmarketcap.com/meta-platforms/cash-on-hand

This way they would not have to risk failing to issue a bonds at a later time.

Re: Meta plans $7B bond issue

#13

Post by jjtheblunt » Mon, May 01, 2023, 3:37 PM UTC

devnull3 wrote: post #9

Meta has ~$40B as Cash-on-Hand [1]. Why does it need to raise this money via bonds? [1] https://companiesmarketcap.com/meta-platforms/cash-on-hand

perhaps it has greater than $40B of expenses anticipated?

Re: Meta plans $7B bond issue

#14

Post by slashdev » Mon, May 01, 2023, 3:39 PM UTC

Without paywall: https://archive.is/pgyis

Re: Meta plans $7B bond issue

#15

Post by bobthepanda » Mon, May 01, 2023, 3:40 PM UTC

ramesh31 wrote: post #11

misterprime wrote: post #3

I know Facebook/Meta is huge and well established, but a 40 year bond seems like an eternity in the tech world. Is Meta that entrenched that people are this confident that they'll still be around in 40 years? Perhaps there's a lot more to their staying power and value than some web pages, apps, and VR hardware, but I'm not very aware of it. I did note in an article a couple weeks ago that they participate in groups t…

>I think I'm trying to state: "Aren't the bulk of Meta's offerings too susceptible to trends to garner the trust required for a 40 year bond?" Meta has more cash on hand and revenue than most countries . They are an institution unto themselves at this point, regardless of the future success of any individual product.

Yeah, most company implosions take a while, and WeWork, Moviepass et al. are not the norm.

Sears was dying for decades.

Re: Meta plans $7B bond issue

#16

Post by csours » Mon, May 01, 2023, 3:41 PM UTC

slashdev wrote: post #14

Without paywall: https://archive.is/pgyis

Does Reuters have a paywall for some people?

Re: Meta plans $7B bond issue

#17

Post by chris_wot » Mon, May 01, 2023, 3:41 PM UTC

ramesh31 wrote: post #11

misterprime wrote: post #3

I know Facebook/Meta is huge and well established, but a 40 year bond seems like an eternity in the tech world. Is Meta that entrenched that people are this confident that they'll still be around in 40 years? Perhaps there's a lot more to their staying power and value than some web pages, apps, and VR hardware, but I'm not very aware of it. I did note in an article a couple weeks ago that they participate in groups t…

>I think I'm trying to state: "Aren't the bulk of Meta's offerings too susceptible to trends to garner the trust required for a 40 year bond?" Meta has more cash on hand and revenue than most countries . They are an institution unto themselves at this point, regardless of the future success of any individual product.

So why do they need to raise more funds?

Re: Meta plans $7B bond issue

#18

Post by slashdev » Mon, May 01, 2023, 3:42 PM UTC

This is interesting, these will be low risk bonds with a better yield than treasuries. It could be a safe place to park money during the coming recession and get paid for waiting.

Up to 40 year duration, although long duration bonds carry a very large interest rate risk and either make lots of money on a fed pivot or lose lots of money if inflation doesn’t drop and rates go higher.

Re: Meta plans $7B bond issue

#19

Post by shanebellone » Mon, May 01, 2023, 3:42 PM UTC

misterprime wrote: post #3

I know Facebook/Meta is huge and well established, but a 40 year bond seems like an eternity in the tech world. Is Meta that entrenched that people are this confident that they'll still be around in 40 years? Perhaps there's a lot more to their staying power and value than some web pages, apps, and VR hardware, but I'm not very aware of it. I did note in an article a couple weeks ago that they participate in groups t…

In my opinion, the value of its sandbox far exceeds the value of its business.

I would never invest in Meta. I would love to invest in specific IP that's been developed, deployed, and optimized within the Meta ecosystem.

Re: Meta plans $7B bond issue

#20

Post by mdorazio » Mon, May 01, 2023, 3:43 PM UTC

For those curious...

> The Facebook parent plans to use the funds to help finance capital expenditures, repurchase outstanding shares of its common stock, and for acquisitions or investments, according to the report.

Still not clear why they need a bond issuance to accomplish any of these vs. using their massive cash-on-hand warchest. My guess is some kind of interest arbitrage.