HomeShariah Stocks ScreeningIs Facebook INC/Meta Stock Halal to Invest in? Facts you should know :: 19th October 2023
| Ticker | META |
| Company Name | Meta Platforms, Inc. (Formerly Facebook) |
| Shariah Compliance | Compliant |
| DP RATIO | 0.24% |
Business Sector Screening
We have conducted a comprehensive review on Meta Platforms, Inc. from a Shariah point of view and analyzed its sources of income to know whether they are complying with Shariah principles.
Meta Platforms, Inc., formerly known as Facebook, is a social media and social networking company based in United States. Among the notable brands, the company owns Instagram as well as WhatsApp. Let’s have a look at the segments from which the company derives its operating revenue from and analyze it from Shariah’s point of view.
Segment Break-up
(In Millions of USD) for Year ended 31st December 2022
| Segment Description | Revenue | Non-Permissible Revenue | % Non-Permissible Revenue | Non-Permissible Segment Classification | Comments |
| Advertising | $113,642 | – | – | – | – |
| Other revenue | $808 | – | – | – | – |
| Reality Labs | $2,159 | – | – | – | – |
| Total | $116,609 | $0 | 0% | – | – |
Tricky Areas from a Shariah perspective
Looking into their Revenue streams, the tricky areas that can be observed from a Shariah perspective are the Advertising, and the Content which is displayed on the platform.
Advertising Revenue is generated on the Advertising Services provided, which can be either be textual or pictorial. The marketplace model has controls on generic adverts. The Company does not produce any advertising content of its own, and additionally has a policy which prohibits 30+ areas such as Illegal products/services, Tobacco related products, Drugs, Adult content and p*rnography. Hence, this segment can be considered as Shariah Compliant.
Likewise, the Company has no control on the Content which gets published on the platform, it is completely in the hands of the community. However, there is an ethical policy which removes content that may contain nudity or suggestive content, hate speech, Fake content, and so on.
Based on the above information, it is safe to assume that the business operations of Meta Platforms Inc., would be Shariah Compliant.
Let’s have a look at the non-operating income of the company
| Segment Description | Segment Revenue | Non-Permissible Revenue | % Non-Permissible Revenue | Non-Permissible Classification | Comments |
| Interest income | $276 | $276 | 100% | Interest Income | – |
| Total Other Income | $276 | $276 | 100% | – | – |
It is clear from the table above that the non-operating income of the company includes interest income, and Investment Income which is Shariah not compliant. This amount is included for the calculation of the Sector Compliance and Dividend Purification.
Sector Compliance Calculation:
| Total Revenue | $116,885 |
| Non-permissible operating revenue | $276 |
| Interest Income | $1,497 (50% of 2,994) |
| % of non-permissible revenue | 0.24% |
| Sector Compliance | Pass |
Dividend Purification Calculation:
| Revenue Description | Non permissible Revenue (millions of USD) |
| Non-permissible operating revenue | $0 |
| Non-permissible non-operating revenue | $276 |
| Total Non-permissible revenue | $276 |
| Total Revenue Of The Company | $116,885 |
| Dividend Purification Ratio | 0.24% |
Financial Ratio Screen:
(All figures in millions of USD for the Quarter ended 30th June 2023)
| Particulars | Amount | Remarks |
| 3 years Average Market | 685,141.136 | – |
| Total Debt | 19,815 | – |
| Islamic Debt | 0 | – |
| Adjusted Debts | 19,815 | – |
| LC1 Ratio | 2.89% | – |
Source: All the above information is based on the website of the company and the latest Quarterly Report for the period ended 30th June 2023.
Conclusion
Given the above information, we at Islamicly believe that Meta Platforms, Inc. is a Shariah-compliant (Halal) company as per the Shariah screening criteria.
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Last modified: September 11, 2024
