CNBC’s Jim Cramer on Thursday used Facebook parent company Meta Platforms as a case study on why holding downtrodden stocks sometimes pays off.
“When companies change their stripes, or when they’re incredibly well-managed, or disciplined, or efficient, or when they invent amazing products and reinvent themselves on the fly, you should stick with them,” he said.
Shares of the company soared over 23% on Thursday after the company reported a fourth-quarter revenue beat and announced a $40 billion stock buyback Wednesday evening.
CEO Mark Zuckerberg also called 2023 a “year of efficiency” and committed to cutting costs, with management lowering its expense outlook for the year.
The tech giant’s prioritization of efficiency comes after investors worried for months about Meta’s pricey investment into the metaverse, sending its stock tumbling. Shares of Meta closed at about $189 a share on Thursday, more than double its 52-week low of roughly $88 in November.
Cramer, whose Charitable Trust owns shares of Meta, also reminded investors that they should buy and sell stocks in stages rather than making hasty, all-or-nothing trading decisions – and that waiting for the bottom is often rewarding.
“When the company’s well-run, the pain often represents a great buying opportunity,” he said.