Are you ready to do some whale watching? Of course, I mean investing “whales” who control billions of dollars’ worth of capital. One famous whale holds over half a billion dollars’ worth of Meta Platforms (NASDAQ:META) stock, believe it or not. Yet, that’s not the only reason to consider Meta Platforms now.
At the same time, there are commentators who doubt that Meta Platforms will offer good value to the shareholders. Will you follow them, or will you swim with the whales in 2024? The choice is yours, but don’t be surprised if Meta Platforms continues to thrive while the short sellers struggle to survive.
Which Whale Loaded Up on META Stock?
Chances are pretty good that you’ve heard of legendary investor David Tepper, head of Appaloosa Management. Reportedly, Tepper’s fund bought 447,500 Meta Platforms stock in this year’s third quarter.
That brought Tepper’s fund’s position to 1.95 million META stock shares, representing a position-size increase of 29.78%. At the time this was reported, the fund’s total stake in Meta Platforms shares was worth a whopping $585.41 million.
Unfortunately, required financial filings rarely reveal why a whale like Tepper buys and sells stocks. Some skeptics and short sellers might question Tepper’s judgment; is he foolish to take such a large share position in Meta Platforms?
So far in 2023, it hasn’t been foolish at all to invest in this “Magnificent Seven” social media juggernaut. Sure, Meta Platforms has encountered pushback from lawmakers and regulators. Yet Meta continues to evolve and adapt.
For instance, Meta Platforms now allows Instagram and Facebook users in Europe to pay a subscription fee to opt out of advertisements. That’s a smart move for two reasons. First, the subscription fee will provide a revenue source for Meta. Second, offering ad-free versions of Instagram and Facebook can help to placate regulators who don’t like the way Meta Platforms delivers intrusive advertisements.
Is TikTok a Problem That Meta Platforms Can’t Handle?
Beyond the challenges posed by regulators, Meta Platforms also has to deal with competition in the social media domain. One analyst seems concerned about this issue.
Specifically, Needham analyst Laura Martin claimed that “TikTok is eating” Meta Platforms “alive.” Martin complained that Facebook “doesn’t control its distribution or content,” and added, “I don’t know how you can have a competitive advantage.”
I certainly hope Martin didn’t short-sell META stock in 2023. Meta Platforms has had to deal with strong competition from TikTok all year long, yet Meta’s share price has more than doubled.
I seriously doubt that Tepper is losing sleep over Meta Platforms’ competition from TikTok. By investing in Meta, Tepper is participating in the growth of a highly successful social media behemoth.
Just remember, Meta Platforms reported 23% year-over-year revenue growth and 168% EPS growth in 2023’s third quarter. Does this sound like a company that’s being “eaten alive” by TikTok?
Just Relax and Stay Long With Meta Platforms Stock
You don’t have to be a whale like Tepper to invest in Meta Platforms today. If you’re seeking portfolio exposure to a powerful revenue generator, consider buying and holding a moderately sized position in META stock.
Or, you can side with the skeptics and worry about regulatory pushback, TikTok stealing market share from Meta Platforms, and so on. There will always be something to complain about, no doubt. Yet, in all likelihood, Meta Platforms will continue to prevail and the META stock short sellers will keep on losing money.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
