Buy Facebook Meta shares
Have you decided to invest in Facebook shares, which is one of the giant American companies? Here’s everything you need to know about the Facebook (currently dead) buying process.
Meta (FB), formerly known as Facebook, has seen upward and downward movements over the past years in terms of share price. Since its initial public offering in May 2012, Facebook has managed to maintain its position as a high-profile company that constantly captures the public’s imagination. Meta Corporation is one of the largest global US corporations and is widely owned by individual and institutional investors. It is included with other heavy tech companies in the famous FAANG acronym along with other leading companies such as Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG).
Facebook shares had an exceptionally strong and smooth rise for several years after the IPO, but shareholders were increasingly worried about data privacy scandals and antitrust investigations. Meta shares professionally overcame these issues and managed to reach an all-time high in August 2021, falling by 25% on February 3, 2022, after the company presented its quarterly results and revenue forecasts that came after analyst estimates.
Buy Facebook shares
If you see rewarding investment opportunities for you in buying Facebook shares, here are some things that you must take into consideration before making any decision:
Some historical bumps
Of course, like any other company, the social media giant has not been exempt from problems and bumps, and this company experienced its biggest bumps in 2018. Issues of serious concern have been piling up for years on this company regarding the way it handles user privacy, fake news, and what the company has played It has an implicit role in allowing criminals and terrorists to use Facebook and breach user data in huge proportions.
Facebook faced the harshest response for helping British political consultancy Cambridge Analytica mine and exploit millions of user profiles that appear to have been misused to target political ads during the US presidential election season in the UK and in the Brexit referendum campaign.
Partly as a result of that personal data scandal, Facebook issued lower ad revenue guidance in its July 2018 earnings report which contributed to the company’s stock dropping as much as 22% in one trading day. This may represent the largest downward movement in shares until February 3, 2022 when Facebook’s stock fell by as much as 27%. In fact, the 2018 decline represented the largest loss of market value in the history of the US stock market per share at about $119 billion. Initial estimates indicate that the market value has depleted by $230 billion on February 3, 2022.
Facebook Stock Analysis (Stock Currently Dead)
When buying levels of Facebook shares are at their lowest, it is likely that buyers are well aware of the reasons for this decline in a way that makes them more able to close good deals and make a profitable investment decision even amid bearish market sentiment.
Some may come to a good judgment only after doing a careful analysis of the company’s prospects. In times like these, investors, especially beginners, need to be able to analyze situations and come up with decisions that will bring them profit even in tough and downward times.
Venturing in the stock market may seem very scary, but to practice, the investor must take any risks and dare to venture into the market. Before buying any stock, investors must do their due diligence to ensure that the company and its stock has the potential to perform well and improve. This can include different forms of analysis, the most important of which are fundamental analysis and technical analysis. In a fundamental analysis, the investor evaluates the intrinsic value of a stock by taking into account general economic and industry conditions, as well as the company’s finances and management. Technical analysis uses statistics that include the previous price and volume of a stock. Instead of looking at a company’s intrinsic value, technical analysis focuses on identifying patterns and trends in current and future stock price movements. Basically, it should Investors research a company’s financial statements and these statements can be found in the most recent Securities and Exchange Commission filings. The company’s website should also have an investor relations page.
Do the necessary research
To ensure that the decision to buy Facebook stock is correct and rewarding, the investor should analyze advertising revenue growth including mobile device growth, usage trends, risks to operations as well as forecasts and guidance. An investor should also look at the trends in profit margins and gross revenue as well as the numbers of monthly active users. Are these numbers going up, down, or skewed?
After doing due diligence, doing the necessary research, and making sure that the decision to buy Facebook stock is the right one, the investor should determine if the current price of the stock is a suitable entry point. Fundamental analysts calculate valuation metrics to determine whether a stock is undervalued (when the entry price is more attractive) or overvalued (investors may want to wait for the price to drop before buying the stock).
The price-to-earnings ratio (P/E ratio) is a very common valuation metric, but there are many other metrics that can be drawn upon as well. The meta stock’s price-to-earnings ratio was 23.1 as of February 3, 2022. In isolation, that doesn’t tell investors much. However, if compared to historical or industry P/E ratios, this mix can help an investor determine how to value a stock relative to its past and its competitors.
Another way to find out if a stock price is a good entry point is to look at the stock’s performance history. Try doing some technical analysis using price and volume data to analyze trends in supply and demand and find favorable entry points based on popular trading patterns.
Determine the number of Facebook shares to buy
If you decide to buy Facebook shares at the current price that is a good entry point for you, the next step is to calculate the number of shares to buy. Most online brokerages have a calculator to calculate how many shares to buy.
If you don’t have access to this tool, here’s how to calculate how many Facebook shares to buy:
Total amount to be invested in Facebook stock / Facebook share price = Number of Facebook shares that can be bought.
Considering the current Facebook share price at $227.85 on March 31, 2022 and if the total purchase amount is $10,000, then the investor can buy 43.88 Facebook shares.
Investing in Facebook stocks (previously dead)
In general, it is difficult to predict exactly whether the Facebook stock will rise or fall in the future. However, the investor must be aware of a number of things before making the decision to invest in Facebook shares or any other shares. Here are some of these things:
1- Facebook shares are not cheap
The price of one Facebook share has been hovering in the $380-$200 range since 2021. That’s a lot for a single share. This does not mean that the stock is overvalued, but rather that traders view a company’s share price in the context of earnings, where the price-to-earnings (P/E) ratio is given by taking the company’s earnings per share and dividing it by the price per share. Facebook’s P/E ratio was around 24 as of November 2021. Many tech companies have higher P/E ratios (over 20) because they have strong expectations for growth and this puts Facebook’s P/E ratio in a high position, but not to an extreme level. Apple had a P/E ratio of about 26 as of November 2021. Alphabet’s P/E ratio was around 28 and Amazon’s P/E ratio was around 68 at that time as well.
2- Facebook stock is volatile
Facebook or Meta currently is a social media company specializing in the communications industry. However, it is often combined with other organizations that rely on new technology, such as Google, Amazon, Apple, Netflix and Microsoft often known as FAANG and FAAMG stocks. These companies tend to grow quickly, but they can also have some wild price swings. This may be more true in Meta’s case because as a high-profile company it always seems to be in the news. You can always see a company’s volatility by looking at a number called “beta,” which is a measure of how much a stock has gone up or down compared to a relevant benchmark. A scale of 1.0 means it has the same volatility as the S&P 500, while a higher number means it is more volatile than it is. Facebook knew a percentage The flip is at 1.27 as of November 2021 which means it is more volatile than the S&P 500. Volatility is not always bad in and of itself, but not every trader can handle the situation of seeing prices go up and down constantly. If you are investing in Meta, it may be best to avoid looking at the daily price changes and avoid worrying about whether or not you are making profits in the short term.
Facebook got off to a rocky start, but it has managed to generate a lot of returns for its investors. The stock initially underwhelmed despite the hype surrounding its 2012 IPO. Technical issues prevented some orders from going through. Facebook’s share price, which started at $38, rose by just 23 cents on its first day on May 18, 2012 to drop below $30 for several months, as it took more than a year before buyers of these shares started enjoying the big gains.
3- Facebook does not pay dividends
Facebook stock is a growth stock. Although the company wants to expand rapidly and see greater revenues and profits with each quarter, all its profits are returned to it to support its growth and expansion. This means that investing in Facebook shares will not give you a dividend benefit as a shareholder. If you decide to invest in Facebook shares, you must be comfortable knowing that the money goes back to the company with the aim of increasing revenue, which may mean giving a higher value to your shares.
This means that your investment in Facebook stock may not constitute a passive income source for you, at least not at the moment. Is ditching income in favor of the promise of greater growth a smart move? It depends on your financial goals and your investment schedule. You should be able to invest in growth that prevents you from taking advantage of the dividend if you are far from retirement and you want to invest in these stocks for the long term. If you want your stocks to provide you with income, you may want to look for another stock to invest in.
4- Indirect investment in Facebook shares
You may already be invested in Facebook stock if you own shares in a mutual fund or exchange-traded fund (ETF), particularly one that tracks the S&P 500 or the broader stock market.
Meta is one of the 10 largest companies in the world by market capitalization, so most of the major mutual funds invest in it. The Vanguard 500 Index Fund, available to new investors such as Admiral Shares (VFIAX), follows the S&P 500 and invests about 2% of its portfolio in Facebook. iShares Core S&P Total Stock Market in the US invests about 1.64% of its holdings in this company’s stock as well. Many other technology-focused funds and exchange-traded funds (ETFs) may offer more exposure to a meta stock. These mutual funds and ETFs provide you with a great way to invest in Facebook stocks without exposing yourself to the risks of owning volatile individual stocks.
Summary
Making the decision to buy and invest in Facebook shares requires doing a lot of research, exploration and analysis, as the investor must ensure that his decision will be rewarding and appropriate. Experts always advise investors in all sectors not to invest in anything before they can determine the percentage of risk involved in their investment and whether they can bear it. So be careful and study your moves well before making any purchase and investment move.
Disclaimer: The content of this article is for informational purposes only. The information provided should absolutely not be considered as investment advice or a recommendation. No warranty is made, express or implied, as to the accuracy of the information or data contained herein. Users of this article agree that Money Secrets does not accept responsibility for any of their investment decisions. Not every investment or trading strategy is suitable for anyone. See the risk warning statement.