If you're wondering why Meta’s stock didn’t even flinch when news dropped that ValueAct took a $1 billion stake, you’re not alone. Turns out, this isn’t your typical activist investor play where boardrooms get flipped upside down and CEOs start buckling at their knees. 

(Source: Giphy) 

Nope, apparently, ValueAct is taking a chill pill on this one. Meaning, no dramatic changes hinted, and definitely no ominous letters titled “Time to Get Fit" (looking at you, Altimeter Capital) - instead, this is just a cordial billion-dollar handshake and a slap on the a$$ for goodluck. 

(Source: CNBC) 

What’s interesting here though, is that while Meta is a $1.5 trillion behemoth, this marks the largest ever to be targeted by an activist investor. But again, ValueAct isn’t your typical activist investor. They are the equivalent of the cool, more laid back “Dads” who let you drink over the weekend - and have girls stay past 11:00pm with… gasp… your door closed. 

So don’t expect ValueAct to storm in with pitchforks in hand demanding Zuck to rename Meta back to Facebook. Especially considering the main reason, they’ve decided to get in bed with Meta basically comes down to Zuck’s AI moves. 

(Source: Barrons) 

As it turns out, ValueAct CEO Mason Morfit is a fan of Zuck’s AI ambitions and thinks the social media giant is on the right path. And honestly, with AI being the buzzword of the decade and Meta shares outperforming the S&P 500 with 63.76% YTD gains, who can blame them?

Unlike the usual suspects in the activist world (sup, Elliott and Trian), ValueAct is more about constructive conversations than hostile takeovers. For example, when they took a seat at Microsoft’s board back in 2013, they didn’t show up with a flamethrower. Instead, they quietly helped steer the company toward better performance, and we all know how that turned out—Azure, anyone?

(Source: Reuters Circa 2013) 

As a result, this is clearly more of a long-term bet on Meta’s AI future, not a "break-it-up" moment like Elliott’s $5 billion call for Honeywell to split in two. Now with that said, here’s the juicy part: ValueAct’s $1 billion vote of confidence in Meta is being seen as a validation of all things AI under Zuck’s reign.

Which might seem pretty outlandish considering Meta’s been pouring cash into AI and the metaverse like it’s going out of style. But unlike Zucks Metaverse, which has just turned out to be a steaming pile of sh*t burning cash, the AI side of things are looking a lot more… real. So given that ValueAct has even bothered to throw a billy at Meta shows they have belief that Meta’s AI push has exponential potential. 

(Source: Giphy) 

So, given all of this, what’s next for the Facebook-turned-Meta-turned-AI juggernaut? Probably more of the same TBH: AI, more AI, and maybe some VR headsets if you're into that sort of thing. Because again, with a chill player like ValueAct playing the long game here, don’t expect any sudden moves or major shakeups.

It’s clear they’re betting on AI to be Meta’s golden goose, and as long as Zuck keeps his eyes on the prize, they’ll be happy to ride shotgun. So for now, Meta can keep chugging along on its AI mission with a little extra swagger, knowing that a $1 billion activist investor is rooting for them—from a safe distance.

(Source: Giphy) 

In the meantime, you know the drill, keep an eye on Meta. But when it comes to any other AI play for that matter, if it looks like sh*t, and smells like sh*t, well, friends… it’s probably sh*t. Meaning stay away and only place your bets on plays that are showing real signs of potential. 

TLDR: Take a page out of ValueActs playbook. They seem to know what’s up… at least for now.

As always, stay safe and stay frosty, friends! Until next time…

P.S. Our next trade alert will be a surprise. We will be releasing all our alerts on random days and times (unless we say otherwise). Want to ensure you get access to these alerts in real time? The only way is to become a Stocks.News premium member, and you’ll also get access to our Insider Trading tool (to see what Nancy and her Capitol Hill buddies are doing with their six-figure-salaries millions) and a host of other indicators and tools in addition to our trade alerts multiple times a week. And the best part, is it’s less than the price of a subscription to your favorit OnlyFans page (with of course, no long term commitments). Click here for all the details

Stocks.News holds positions in Meta Platforms and Microsoft as mentioned in the article.