Meta defined 2023 as the year of efficiency, with revenue growing 16%, operating margin rebounding from 25% to 35%, free cash flow recovering to $43 billion, and stock price returning to $353.
Rising yields led to margin calls and collateral requirements for pension funds using LDI strategies, forcing funds to sell government bonds for cash, which further pushed up yields.
The Bank of England is conducting targeted purchases of long-term government bonds to provide liquidity to LDI funds and buy time for deleveraging, after which bond prices subsequently converged.
A sudden change in UK fiscal policy expectations caused 30-year government bond yields to rise by 140 basis points within 4 trading days, triggering intense volatility in the bond market.
The Bank of England later estimated that during the period of government bond volatility in September 2022, the scale of margin calls related to pension fund LDI strategies exceeded 70 billion GBP.
Between September 23 and October 14, LDI funds sold £23 billion in government bonds, while pension schemes sold an additional £14 billion.
Meta's ad unit price fell by 16%, capital expenditure rose due to Metaverse investment, and free cash flow dropped from $38.4 billion to $18.4 billion, with the stock price falling to approximately $120.
Meta repurchased 160 million shares for approximately $28 billion, but the buyback failed to offset the impact of declining cash flow and rising discount rates on intrinsic value.
GameStop stock price rose from its intraday low on January 8 to its intraday high on January 28, an increase of approximately 2700%, far exceeding the explanatory scope of conventional valuation models.
The SEC report disclosed that the short interest ratio of GameStop's circulating shares once reached 122% in January, caused by the same batch of shares being repeatedly transferred back and forth.
Meta's fundamentals remained strong in 2021, and it conducted $44.8 billion in stock buybacks; the video states that buybacks provide buyer depth but do not guarantee that prices will not be repriced.
Between January 13 and 29, GameStop averaged approximately 100 million shares traded per day, which is over 1400% higher than the daily average trading volume in 2020.
On January 27, the number of independent accounts participating in GameStop trading approached 900,000, whereas at the beginning of the month it was less than 10,000.