[misterprime]

I know Facebook/Meta is huge and well established, but a 40 year bond seems like an eternity in the tech world. Is Meta that entrenched that people are this confident that they'll still be around in 40 years? Perhaps there's a lot more to their staying power and value than some web pages, apps, and VR hardware, but I'm not very aware of it.

I did note in an article a couple weeks ago that they participate in groups that commission undersea Internet cables. Those sorts of infrastructure investments seem to have more staying power to me than the other offerings.

I think I'm trying to state: "Aren't the bulk of Meta's offerings too susceptible to trends to garner the trust required for a 40 year bond?"

[wefarrell]

Consider the very first cohort of internet companies - AOL, CompuServe, Yahoo, Ask Jeeves, etc...

None of those businesses are around today, but how many of them had their equity erased and had their bondholders take a haircut? I can't say exactly, but my guess is that none of the top 10 biggest internet companies of that era had their equity fully wiped out.

[dogma1138]

Quite possibly some of the strategy behind this is to improve their staying powers.

If institutional investors hold bonds with 40 year maturity in Facebook they might be less inclined to invest in companies that might upend them.

[almog]

> If institutional investors hold bonds with 40 year maturity in Facebook they might be less inclined to invest in companies that might upend them.

They have no obligation to hold these bonds to maturity.

[shanebellone]

In my opinion, the value of its sandbox far exceeds the value of its business.

I would never invest in Meta. I would love to invest in specific IP that's been developed, deployed, and optimized within the Meta ecosystem.

[blsapologist42]

Bondholders get the $$ first when a company goes under. And typically businesses don't completely disappear and lose all their assets. They usually have a slow decay then get acquired by someone else who takes over the debt.

In any case these factors will presumably lead to an interest rate premium for bondholders. It's just a question of whether you want to take the risk or not.

[ramesh31]

>I think I'm trying to state: "Aren't the bulk of Meta's offerings too susceptible to trends to garner the trust required for a 40 year bond?"

Meta has more cash on hand and revenue than most countries. They are an institution unto themselves at this point, regardless of the future success of any individual product.

[bobthepanda]

Yeah, most company implosions take a while, and WeWork, Moviepass et al. are not the norm.

Sears was dying for decades.

[chris_wot]

So why do they need to raise more funds?

[voisin]

To avoid taxes many companies keep profits offshore in lower tax jurisdictions, only paying US taxes when money is repatriated. It is super common for companies to have billions offshore but to keep it there, take out US debt to und share buybacks or other US domestic initiatives and then only repatriate each year the amount needed to service that debt.

IMO, it’s a stupid loophole that legislators should close.

[s1artibartfast]

Need to or want to?

Offering a bond and using it for buybacks is a way for shareholders to make future profits today.

[0zemp2c]

why does any company?

because they see the terms as advantageous

all the money-flush tech companies issue debt, even though they have no "reason" to

[bragr]

Might be cheaper to borrow than turn some cash equivalent into cash or move it where they need it.

[hospitalJail]

Maybe some lawyer can read the fine print that everyone agreed to.

Can they sell our emails + IP addresses to marketing companies who are going to exploit us based on our facebook posts/likes by targeting our insecurities? That might last 40 years.