Facebook Inc. said it has no plans to pay shareholders a dividend in the near future, signaling that the social network sees itself as a growth company that will put its cash back to work to fuel sales.
“We take very seriously the work we do to ensure we invest every dollar wisely,” Chief Financial Officer David Ebersman said at Facebook’s annual shareholder meeting in Redwood City, California. “At this time our focus really is on using the cash we have to invest in growing the business, so we don’t pay a dividend and don’t anticipate doing so in the near future.”
The world’s biggest social network, which grew revenue 55 percent last year, has been investing in creating new mobile applications, building out its advertising business and increasing Internet connectivity around the world. The Menlo Park, California-based company is betting that it will return more value to shareholders by growing the size of its business than by giving regular cash payouts.
Facebook has also spent heavily on acquisitions, agreeing in February to pay about $19 billion to acquire WhatsApp Inc., a messaging application with half a billion users. The company also said it will acquire virtual-reality goggles maker Oculus VR Inc. for about $2 billion in March.
Ebersman said as Facebook matures as a company, it will continue to have conversations about how best to return value to shareholders. Ebersman, who has said he will step down from the CFO position, will be replaced by David Wehner on June 1.
The meeting’s tenor contrasted with Facebook’s annual shareholder gathering last year, which was its first as a public company. At that event, Chief Executive Officer Mark Zuckerberg faced the wrath of investors who had lost much of the money they put into the company at the time of its May 2012 initial public offering. The stock has since recovered.
© Copyright 2024 Bloomberg News. All rights reserved.