Office Hours: Should Meta Pay Dividends? + International Students, and Finding Hope

Dividend Debate

Scott Galloway explores the idea of whether Meta should start paying dividends, a move often seen as a sign of a company's maturity. He notes that Meta, despite its past growth, now faces challenges in innovation, with many of its ventures like Facebook Watch and Instagram Shopping not yielding expected results 1. This stagnation raises the question of whether Meta should return cash to shareholders through dividends, similar to what Apple did when it matured 2.

Stock buybacks and dividends are a way of returning cash to shareholders such that they don't have to sell the stock to get cash flow.

--- Scott Galloway

Scott suggests that while Meta might argue its current lack of growth is temporary, the digital marketing industry itself is still expanding, albeit Meta's specific struggles with the Metaverse and competition from Apple 2.

   

Market Challenges

Meta's market position is under pressure due to its inability to establish its own distribution channels, unlike competitors who control their ecosystems. Scott Galloway highlights Meta's failed attempts with products like Portal and Oculus, which have not captured the market as intended 3. This lack of control has led to significant financial setbacks, including a $10 billion hit to their top line due to changes in targeting capabilities.

Meta's targeting has been severely hampered or hamstrung, and that has probably taken $10 billion off of their top line.

--- Scott Galloway

Despite these challenges, Scott points out that Mark Zuckerberg's control over Meta means the decision to pay dividends is unlikely, as he continues to pursue ambitious projects 3.