👉 Background: Meta Platforms is the company behind Facebook, Instagram and Whatsapp. In 2021, they changed the parent company name from Facebook to Meta, back when the metaverse was going to become the next big thing. On the other hand, EssilorLuxottica is the French-Italian eyewear giant behind Ray-Ban, Oakley and owns the licence to produce pretty much every fancy brand of sunnies you see at the airport.

‍👉 What happened: Previously, Meta and EssilorLuxotica partnered on the Rayban smart glasses that launched in 2021. These glasses let you take calls, record things and also features Meta AI voice assistant. But now, Meta has acquired a stake worth roughly €3 billion in Ray-Ban’s maker, Essilor Luxotica.

‍👉 What else: This is a strong signal that Meta plans to expand this smart glasses partnership. And while this investment is just a 3% stake today, Meta plans to possibly grow that stake to 5% as well.

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‍What's the key learning?

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‍💡Sometimes, buying a stake in a company isn’t just about the financial return, it's about showing strategic alignment. For some, like Zuck, this can also come in a form of investing €3 billion as a "gesture".

💡In September 2024, when this was first flagged, Zuck said that this investment would be “symbolic” as a way to cement their long-term partnership. This symbolic ownership sends a strong signal to the market, to investors as well internal teams.

💡 Next minute: the share price of EssilorLuxotica jumped up faster than someone untagging themselves from high school photos (or up 6%). It’s similar to when car manufacturers take a stake in EV battery Stellantis, the maker of Jeep, Fiat and Peugeot did it last year when it took a 4 billion euro stake in the world’s biggest EV battery maker.