Meta Reportedly Issuing $10 Billion in Bonds to Invest in Its Metaverse Products and Other Initiatives – Metaverse Bitcoin News

Meta, the social media company, is planning to issue its first set of bonds to fund new investments and operations, according to the report. The company will sell $10 billion in debt, to maintain healthy cash flow and fund the acquisitions, according to two people with knowledge reported on the deal.

Meta to issue bonds to finance new investments

Meta, one of the first companies to pivot to the metaverse as part of its core business model, is set up to issue debt to further finance part of its operations and maintain healthy free cash flow. strong. Based on report Coming from people close to the deal, the company will issue $10 billion in bonds as part of the first debt offering of its kind to the tech giant.

The operation, scheduled for Thursday, has received a massive response, with investors putting in $30 billion to capitalize on the move. The bonds will come in maturities ranging from 5 years to 40 years, with most of the demand going towards the latter.

According to sources, the offering has been going on for the past two months, with Meta deciding to launch it following the release of its latest earnings report in July. The company has received satisfaction ratings from various agencies, received an ‘A1’ rating from Moody’s and an ‘AA-‘ rating and a ‘stable’ outlook from S&P.

An Expensive Metaverse Move

This bond issue relates to a contraction of the free cash flow the company has experienced over the past year. Meta has free cash flow of $4.45 billion, compared with $8.51 billion the company had a year ago. The sources indicated that the bond offering would have the goal of giving the company more breathing room to continue to fund part of its operations, including its aggregate initiatives. company.

Meta’s promotion of the metaverse is costing the company a lot of money in research and development. In its latest earnings call, the company report that its metaverse unit, Reality Labs, posted over $400 million in revenue, but recorded a loss of more than $2.8 billion in the second quarter of 2022. The predictions weren’t good either, with the company taking on admitted that Reality Labs will continue to lose money in Q3.

Meta has also made some moves on the selling side of the equation, nurture The price of its flagship VR headset, the Quest 2, is $100 “to continue investing in moving the VR industry forward in the long term.”

What do you think of Meta’s $10 billion bond issue? Let us know in the comments section below

Sergio Goschenko

Sergio is a crypto journalist based in Venezuela. He describes himself as a latecomer to the game, entering the crypto world when the bull run occurred in December 2017. Has a computer engineering background, lives in Venezuela and is affected by the volatility. As the cryptocurrency booms on the social level, he offers a different perspective on the success of cryptocurrency and how it helps the unbanked and underserved.

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