Meta's rebound

A client wrote to me at the end of 2022, complaining about the poor performance of Meta Platforms. The company had renamed itself in October 2021 and hit a high a few days later of around $380 before crashing to $93. It lost 76% of its value in a matter of months.

Tech stocks had a torrid time in 2022 because inflation spiked higher, the Fed hiked interest rates and consumers were confused in the aftermath of Covid. Meta had the added problem that Zuckerberg was spending billions on creating a metaverse that no-one wanted.

Here's what the unhappy client said: "It is a mathematical fact that if a share has dropped in price by 60%, it must treble to get back to where it started. Obviously this is not going to happen".

I replied that I did not agree. "I would not be surprised to see these stocks regain their all-time highs. Precipitous falls can be followed by heroic recoveries".

Well, the rest is history, Meta proceeded to go from $93, to its close last week at an all-time high of $600 per share.

Stay long and strong.