Facebook-parent Meta said on Thursday it would make its first-ever bond offering, at a time when the social media company is making massive investments to fund its virtual reality projects. Meta did not disclose the size of the offering but said it would use the proceeds for capital expenditures, share repurchases, acquisitions or investments.
The company received an ‘A1’ rating from Moody’s and an ‘AA- rating’ and a ‘stable’ outlook from S&P. Meta is selling four tranches of bonds with maturities ranging from five years to 40 years.
Among big technology companies, Meta is the only one that does not have any debt on its books. Tapping the market now would give it more financial room as it tries to fund some expensive overhauls, including a bet on augmented and virtual reality technology, investors who heard its presentation for the bond offering on Tuesday said.
It might also be a rare opportunity to do so relatively cheaply in the current market environment. Corporate bonds have rebounded in the past month after a rout earlier this year, as investors hoped the US Federal Reserve’s fight against inflation through rapid rate increases was starting to have some impact.
This week the US investment grade primary bond markets have rebounded, with companies raising more than $38 billion (roughly Rs. 3,01,000 crore), making it the eighth busiest week of the year, according to Informa Global Markets data.
Bankers and investors said such issuance windows may be rare in coming months. One banker in charge of a bond syndicate desk at a US bank said credit spreads could widen later this year, increasing funding costs.
Meta’s bond issuance will come after the company issued a gloomy forecast and recorded its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital ads sales.
Its free-cash flow has been depleting as it charges ahead with its metaverse plans, which led the change in its name to Meta from Facebook last year.
In the second quarter ended June 30, Meta had $4.45 billion (roughly Rs. 35,200 crore) in free cash flow, compared with $8.51 billion a year ago (roughly Rs. 67,400 crore) and $8.53 billion (roughly Rs. 67,600 crore) in the prior quarter.
Chief Financial Officer Dave Wehner said on a post-earnings conference call that company had a “substantial amount” in its buyback program and expects to continue with buybacks as part of its capital allocation strategy.
© Thomson Reuters 2022
Delhi High Court Grants Time for Government to Reveal Plans to Regulate De-Platforming of Social Media Users
The Delhi High Court on Wednesday granted time to the Centre to inform if it was drafting any regulations to govern the issue of de-platforming of users from social media. Justice Yashwanth Varma was hearing a batch of petitions concerning the suspension and deletion of accounts of several social media users, including Twitter users.
Central government counsel Kirtiman Singh urged the court to list the cases after two weeks to enable him to come back with further instructions concerning any draft policy on the de-platforming of social media users.
Senior counsel for one of the social media platforms said that in case such guidelines are formulated, the scope of proceedings before the court can be navigated accordingly.
The court listed the case for further hearing in September while asking the Centre to state its stand.
In its affidavit filed in one of the cases against the suspension of the petitioner’s Twitter account, the Centre has said that an individual’s liberty and freedom cannot be “waylaid or jettisoned in the slipstream of social and technological advancement” and the social media platforms must respect the fundamental rights of the citizens and conform to the Constitution of India.
It has said that social media platforms should not take down the account itself or completely suspend it in all cases and complete de-platforming is against the spirit of Articles 14, 19, and 21 of the Constitution of India.
Stating that it is the custodian of the users’ fundamental rights in cyberspace, the Centre has said that a social media account can be suspended or de-platformed only in cases such as in the interest of the sovereignty, security, and integrity of India, friendly relations with foreign States or public order or pursuant to a court order or the content is grossly unlawful such as sexual abuse material.
Social Media Firms Introduce Few Changes Ahead of Upcoming US Midterm Elections
Social media companies are offering few specifics as they share their plans for safeguarding the US midterm elections. Platforms like Facebook and Twitter are generally staying the course from the 2020 voting season, which was marred by conspiracies and culminated in the January 6 insurrection at the US Capitol.
Video app TikTok, which has soared in popularity since the last election cycle while also cementing its place as a problem spot for misinformation, announced Wednesday it is launching an election center that will help people find voting locations and candidate information.
The center will show up in the feeds of users who search election-related hashtags. TikTok is also partnering with voting advocacy groups to provide specialized voting information for college students, people who are deaf, military members living overseas and those with past criminal convictions.
TikTok, like other platforms, would not provide details on the number of full-time employees or how much money it is dedicating to US midterm efforts, which aim to push accurate voting information and counter misinformation.
The company said it is working with over a dozen fact-checking organizations, including US-based PolitiFact and Lead Stories, on debunking misinformation. TikTok declined to say how many videos have been fact-checked on its site. The company will use a combination of humans and artificial intelligence to detect and remove threats against election workers as well as voting misinformation.
TikTok said it’s also also watching for influencers who break its rules by accepting money off platform to promote political issues or candidates, a problem that came to light during the 2020 election, said TikTok’s head of safety Eric Han. The company is trying to educate creators and agencies about its rules, which include bans on political advertising.
“With the work we do, there is no finish line,” Han said.
“As we did in 2020, we have a dedicated team in place to combat election and voter interference while also helping people get reliable information about when and how to vote,” Nick Clegg, Meta’s president of global affairs, wrote in a blog post Tuesday.
Meta declined to say how many people it has dedicated to its election team responsible for monitoring the midterms, only that it has “hundreds of people across more than 40 teams.”
As in 2020, Clegg wrote, the company will remove misinformation about election dates, voting locations, voter registration and election outcomes. For the first time, Meta said it will also show US election-related notifications in languages other than English.
Meta also said it will reduce how often it uses labels on election-related posts directing people toward reliable information. The company said its users found the labels over-used. Some critics have also said the labels were often too generic and repetitive.
Compared with previous years, though, Meta’s public communication about its response to election misinformation has gone decidedly quiet, The Associated Press reported earlier this month.
Between 2018 and 2020, the company released more than 30 statements that laid out specifics about how it would stifle US election misinformation, prevent foreign adversaries from running ads or posts around the vote and subdue divisive hate speech. Until Tuesday’s blog post, Meta had only released a one-page document outlining plans for the fall elections, even as potential threats to the vote persist.
Twitter, meanwhile, is sticking with its own misinformation labels, though it has redesigned them since 2020 based in part on user feedback. The company activated its “civic integrity policy” last week, which means tweets containing harmful misinformation about the election are labeled with links to credible information. The tweets themselves won’t be promoted or amplified by the platform.
The company, which like TikTok does not allow political advertisements, is focusing on putting verified, reliable information before its users. That can include links to state-specific hubs for local election information as well as nonpartisan public service announcements for voters.
TikTok Bans Paid Political Influencer Posts Ahead of Upcoming US Midterm Elections
TikTok will work to prevent content creators from posting paid political messages on the short-form video app, as part of its preparation for the US midterm election in November, the company said on Wednesday.
Critics and lawmakers accuse TikTok and rival social media companies including Meta Platforms and Twitter of doing too little to stop political misinformation and divisive content from spreading on their apps.
While TikTok has banned paid political ads since 2019, campaign strategists have skirted the ban by paying influencers to promote political issues. The company seeks to close the loophole by hosting briefings with creators and talent agencies to remind them that posting paid political content is against TikTok’s policies, said Eric Han, TikTok’s head of US safety, during a briefing with reporters.
He added that internal teams, including those that work on trust and safety, will monitor for signs that creators are being paid to post political content, and the company will also rely on media reports and outside partners to find violating posts.
“We saw this as an issue in 2020,” Han said. “Once we find out about it … we will remove it from our platform.”
TikTok broadcast its plan following similar updates from Meta and Twitter.
Meta, which owns Facebook and Instagram, said Tuesday it will restrict political advertisers from running new ads a week before the election, an action it also took in 2020.
Last week, Twitter said it planned to revive previous strategies for the midterm election, including placing labels in front of some misleading tweets and inserting reliable information into timelines to debunk false claims before they spread further online. Civil and voting rights experts said the plan was not adequate to prepare for the election.
© Thomson Reuters 2022
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