Zinger Key Points
- Dan Niles trimmed his position in Meta Platforms, citing a poor risk/reward over the near term.
- The hedge fund manager said he will repurchase shares on a pullback.
Dan Niles, founder and portfolio manager of Satori Fund, tweeted Thursday that he trimmed Satori Fund’s position in Meta Platforms Inc META, citing a poor risk-reward outlook in the near term.
Niles' decision came as Meta's shares saw a strong year-to-date performance, driven by aggressive cost-cutting measures and the potential ban on TikTok by the U.S. government.
The hedge fund manager remains optimistic about the company's future and intends to repurchase shares during a market pullback.
In the meantime, Niles shifted his focus towards commodities and sports betting stocks, though he did not disclose the specific names he invested in.
Niles initially invested in Meta following the company's third-quarter 2022 results, during which Meta was considered an unpopular investment choice. Shares of Meta have seen an impressive 58% gain year-to-date.
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The social media giant has undertaken several cost-cutting measures as it continues to develop its ambitious metaverse project. In addition to laying off 13% of its workforce in November 2022, Meta recently announced plans to cut an additional 10,000 employees between March and May. The company will also close 5,000 open positions and discontinue lower-priority projects.
CEO Mark Zuckerberg called 2023 as the "year of efficiency" and remains committed to the metaverse. According to a filing with the Securities and Exchange Commission, Meta’s cost reduction initiatives are expected to save the company more than $5 billion in operating expenses.
Despite the short-term outlook prompting Niles to trim his Meta position, his plan to repurchase shares during a pullback signals continued confidence in the company's long-term prospects.
META Price action: Shares of Meta Platforms are trading 2.76% lower to $199.28, according to data from Benzinga Pro.
Photo: Shutterstock
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