Written by Shariah Stocks Screening

Is Facebook INC/Meta Stock Halal to Invest in? Facts you should know :: 19th October 2023

TickerMETA
Company NameMeta Platforms, Inc. (Formerly Facebook)
Shariah ComplianceCOMPLIANT
DP RATIO0.24%

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 DescriptionSegment RevenueNon-permissible Revenue% Non-permissible RevenueNon-permissible segment classificationComments
Advertising
$113,642
      
Other revenue$808    
Reality Labs$2,159    
TOTAL$116,609$00%  

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 pornography. 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 DescriptionSegment RevenueNon-permissible Revenue% Non-permissible revenueNon-permissible classificationComments
Interest income$276$276100%Interest Income 
Total Other Income$276$276100%  

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 revenue0.24%
Sector CompliancePASS

Dividend Purification Calculation:

Revenue DescriptionNon 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 Ratio0.24%

Financial Ratio Screen:

(All figures in millions of USD for the Quarter ended 30th June 2023)

ParticularsAmountRemarks
3 years Average Market685,141.136 
Total Debt19,815 
Islamic Debt0 
Adjusted Debts19,815 
LC1 Ratio2.89% 

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.

Given the above information, we at Islamicly believe that Meta Platforms, Inc. is a Shariah-compliant (Halal) company as per the Shariah screening criteria.

(Visited 979 times, 5 visits today)
Last modified: December 18, 2023
Close