What is Facebook
Meta Platforms, Inc., formerly known as Facebook, Inc., is an American international technology corporation based in Menlo Park, California, that trades as Meta. Facebook, Instagram, and WhatsApp, among other subsidiaries, are all owned by the firm. Meta, along with Amazon, Google (Alphabet Inc), Apple, and Microsoft, is one of the world's most valuable corporations and is regarded as one of the Big Tech companies in US information technology. The sale of advertisement spaces to marketers accounts for a significant portion of the company's revenue.
Facebook, Messenger, Facebook Watch, and Facebook Portal are examples of meta products and services. It also owns a 9.99 percent share in Jio Platforms and has acquired Oculus, Giphy, and Mapillary.
Facebook is a publicly traded company, making its stock available to anyone of legal age interested in purchasing shares.
Should You Buy Facebook Shares (FB)?
Facebook shares will rise and fall in value according to how well the company is performing at a given moment in time. Better-than-expected earnings will make Facebook share prices rise, while weaker earnings will make share prices fall. However, there are many reasons why a company's share price can change.
People trade Facebook shares because, just like other financial instruments, they can be an opportunity to invest money. At a basic level, you can take a position on Facebook shares to get exposure to economic growth. If an economy is in good shape, you might find that companies operating in that specific economic branch or industry will grow too.
Company growth is correlated with share price increases, which is what people are hoping for when they buy Facebook shares.
When Facebook announced its go-public event, many social networking fans who had never invested in stocks before were interested in getting in on the action.
When the FB IPO rolled around in May 2012, the platform had an amazing 526 million daily active users across the globe and had achieved a $4 billion annual revenue run rate. No wonder people were excited about the opportunity to own stock with this amazing growth story.
The stock was offered at $38 per share via the IPO. Shareholders have shared in the company's success. At today's price of over $300 per share, there is a total return of around 1,000% for Facebook shares in 10 years. Yet despite the controversy surrounding the company, Facebook’s stock has shown strength and resilience through the years and become one of the most successful in a decade.
Facebook stock is traded on the Nasdaq Stock Exchange under the FB ticker.
If all that makes you want in on Facebook’s metaverse growth, here is everything you need to know to buy Facebook stock & shares to invest in FB.
How to Buy Facebook Shares
Learning how to buy shares may not sound complicated, but you will need to do some research — and learn the basics — before making your first investment.
- Learn the difference between investing and trading
- Review Facebook’s performance and outlook 2022
- Understand the risks and charges
- Access the trading platform and place your orders
- Stay up to date with the latest news and rumors about Facebook
1. Learn the difference between investing and trading
People have two options to buy shares of stock online. Firstly, they can buy shares in companies on the exchanges where they are listed. For instance, you can buy Facebook stock on the NASDAQ exchange, so you own a share in the company (investor). Alternatively, they can buy Facebook shares without owning them, speculating on the price of the underlying asset (trader).
Investing and trading are similar terms that some people will sometimes use interchangeably – but there are significant differences for you to be aware of.
Investing in Facebook Stock
Investors buy Facebook shares hoping their price will rise and they can sell them later for a profit, adhering to the basic principle of buying low and selling high. Investors will take positions over a longer period, attempting to profit from share price changes as well as dividend payments.
While this means that they might need more initial capital to get started when compared to trading, their losses would be capped at this initial price tag. That said, investors should be aware they might get back fewer returns than they initially invested.
Investors will buy Facebook shares to:
- Make a profit from the Facebook share price rising
- Receive an income from dividends if the company pays them
- Benefit from the effects of compounding
This last point requires investors to hold onto their shares for an extended period. That’s why you’ll sometimes hear the phrase ”time in the markets is better than timing the markets” when talking about share investments.
>> Learn how to invest in stocks
Facebook (or any single stock, for that matter) can be a very volatile investment. You can lower the risk by diversifying your investment holdings.
An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund provides a broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets.
FB currently makes 2.4% of S&P 500 index, meaning $0.024 of each dollar you invest in a S&P 500 index fund goes to Facebook. If you want an index with an even larger FB representation, you might consider investing in a Nasdaq index fund, where FB accounts for almost 5% of holdings.
Communication services exchange-traded funds (ETFs) provide exposure to the performance of companies within the global software industry.
FB makes up 22.86% of XLC (Communication Services Select Sector SPDR Fund), 17.38% of FCOM (Fidelity MSCI Communication Services Index ETF), 17.03% of VOX (Vanguard Communication Services ETF), 16.58% of KNGS (VanEck Social Sentiment ETF), 16.23% of IXP (Invesco S&P Midcap Momentum ETF).
>> Learn what ETFs are and how do they work
Trading Facebook CFDs
On the other hand, traders might seek to capitalize on short-term share price gains. Rather than investing in the shares, traders speculate on the shares’ value. They can speculate on it rising by going long, as well as falling by going short.
Trading Facebook stock means that you are speculating on a share’s price movements with derivatives like CFDs. In other words, you are purchasing Facebook shares without taking direct ownership.
Leverage is available when you use this product, giving you full market exposure for an initial deposit – known as margin – to open your position.
For example, a trader who wanted to buy 100 Facebook shares CFD at $300 per share would only require $6,000 of trading capital, thereby leaving the remaining $24,000 available for additional trades.
But keep in mind that leverage can increase both your profits and your losses as they will be based on the full exposure of the trade, not just the margin requirement needed to open it. This means losses, as well as profits, could far exceed your margin.
With CFDs, you can ‘buy’ (go long) the shares if you think the Facebook stock’s price will rise, or you can ‘sell’ (go short) if you think the Facebook stock’s price will fall.
>> Learn what is CFD trading and how it works
Going Long Facebook CFD
Facebook has a sell price of $310.20 and a buy price of $310.60.
Facebook’s next earnings announcement is fast approaching, and you expect it to be good news.
You think the company’s share price will go up, so you buy 100 Facebook CFDs at $310.60. This is the equivalent of buying 100 Facebook shares.
Because in CFD trading you can use leverage, you do not need to put up the full value of Facebook shares. Instead, you only need to cover the margin, which is calculated by multiplying your exposure with the margin factor for the market you are trading.
So, if Facebook has a margin factor of 20%, your margin would be 20% of the total exposure of your trade (100 share CFDs x $310.60 = $31,060), which is $6,212.
If your prediction is correct:
When Facebook announces its results, it is clear the company had a successful quarter and as you had predicted, its share price climbs.
You decide to close your position when it reaches $330.20, with a buy price of $330.60 and a selling price of $320.20.
You reverse your trade to close a position, so you sell your 100 CFDs for $330.20.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size. $330.60– $310.60 = $20, which you multiply by 100 CFDs to get a profit of $2,000.
If your prediction is wrong:
Facebook’s results are worse than expected, and its share price immediately falls. You decide to cut your losses and sell your 100 CFDs at $302.60.
Your position has moved $8 against you, meaning you suffer a loss of $800.
Going Short Facebook CFD
Shorting with derivatives can be an effective way to protect your investments against downward price movements in your non-leveraged investment portfolio. Also, it can be a way to generate profits outright from shares that are falling in value. But when you go short, your potential losses are theoretically uncapped because there is no limit on how high a company’s share price can rise.
Here is an example:
Suppose Facebook shares are currently trading with a selling price of $310.20, and you think the price will go down. So, you decide to open a short CFD position on 200 Facebook shares CFD. A week later, the buy price reaches $295.40, and you close your position. This means you made $2,960 in profit ([310.20 - 295.40] x 200 = $2,960), excluding additional costs.
If the price rises, you register a loss. For example, if Facebook shares rose to a price of $315.30, you would suffer a $1,100 loss instead, excluding additional costs.
When you create a trading account with CAPEX, you will be able to:
- ‘Buy’ (go long) or ‘sell’ (go short) Facebook and other 2,000 international shares to speculate on their price rising or falling
- Take a position on our range of ETFs to get exposure to a basket of shares from an entire country, index, or sector that could be rising or falling in price.
- Trade a host of global indices to go long or short on the performance of an entire economy with a single trade.
- Use QuantX, the smart portfolio builder that helps you cover the popular industries and only invest in the top-performing stocks.
2. Review Facebook’s Performance and Outlook 2022
Before buying Facebook stock—or any stock (see our guide on how to buy shares)—it’s wise to do some research into the company’s financials, performance, and outlook. The easiest place to get started is through a company’s annual reports and quarterly reports. Public companies like FB are required to publicize detailed information about their financial health in these.
You can find these on Facebook ’s investor relations site or by searching the Securities and Exchange Commission’s (SEC) database.
You may also turn to experts for their input. Brokerage companies frequently release commentary on major stocks and industries, and third-party evaluators like Trading Central provide comprehensive technical and fundamental analysis.
When you combine financial data with expert insight, you will be able to decide how much of your money you want to put into Facebook stock.
Facebook Shares Forecast - Fundamental Outlook 2022
Before you load up the trunk with Facebook shares, pop opens the hood and see what you are really getting into. Remember, when you buy Facebook stock, you are purchasing a small portion of an actual business:
Meta Platforms, Inc., (formerly known as Facebook, Inc.) engages in the development of social media applications as well as virtual and augmented reality products allowing users to connect through mobile devices, personal computers and other platforms.
Facebook's balance sheet, income statement, competition, and management (all explained in our guide on how to research stocks) will help you give the company a good once-over.
You can access research, analyst ratings, and other key information about Facebook via your brokerage account or a financial information website. If you like what you see, your next step is to consider whether Facebook fits into your current investment portfolio.
Facebook 's market capitalization is $889.02B
- The company's Return On Assets (ROA) of 23.77 percent is among the best in the business. Facebook outperforms 98 percent of its competitors in the sector. The average Return On Assets in the industry is -1.24 percent.
- The 30.22 percent Return On Equity of Facebook is among the greatest in the industry. Facebook outperforms 93% of its competitors in the industry. The average return on equity in the industry is 17.79 percent.
- Facebook has a 35.88% profit margin. This is one of the industry's highest returns. 3.30 percent is the industry average. Facebook surpasses its competitors by 94%.
- The low PEG Ratio, which accounts for growth in the Price/Earnings ratio, shows that the company is undervalued.
- With a Price/Earnings Ratio of 22.81, FB is considered to be on the high end of the market.
- With a Forward Price/Earnings Ratio of 21.76, Facebook is overvalued.
- With a price-to-book ratio of 6.67, FB is fairly valued.
- FB is somewhat more costly than the industry average Price/Earning Ratio of 15.89.
- When compared to the industry's average price-to-book ratio of 2.51, Facebook is more costly than its rivals. In the same business, 82 percent of the companies are valued lower.
- Over the last year, the Earnings Per Share has increased by 65.41 percent.
- Over the last five years, earnings per share have increased by 33.83 percent on average. This is a fairly rapid increase.
- According to projections over the next five years, Facebook's earnings per share will expand at a rapid pace. On average, EPS will increase by 17.03 percent per year.
- Facebook's revenue is increasing rapidly. Revenue has increased by 42.23 percent in the last year.
- Over the last five years, Facebook's revenue has increased dramatically. The revenue has been
- increasing at a rate of 36.82 percent every year on average.
- Over the following five years, revenue is predicted to increase by 22.02 percent on average.
The EPS growth is decreasing: in the next 5 years, the growth will be less than in the last years.The Revenue growth is decreasing: in the next 5 years, the growth will be less than in the last years.
- With a current ratio of 4.23, Facebook has little trouble meeting its short-term obligations.
- FB is in a stronger position than the industry average to satisfy its short-term obligations. The company's current ratio is much higher than the industry average of 2.48.
- A Quick Ratio of 4.23 indicates that FB has no problem at all paying its short-term obligations.
- When comparing the Quick Ratio to an average industry Quick Ratio of 2.48, FB is better placed than the average industry peer to meet its short-term obligations.
- The Debt to Equity ratio of FB is in line with the industry averages.
*Last update: December 2021. Source: Yahoo Finance
Facebook has never declared or paid a cash dividend and does not intend to pay.
Facebook Shares Forecast - Technical Outlook 2022
Technical traders analyze price charts to attempt to predict price movement. The two primary variables for technical analysis are the time frames considered and the technical indicators that a trader chooses to utilize.
Our web-trading platform, for example, offers 6 chart types (including the famous Japanese candlestick chart) to help you analyze price performance across different timeframes. It also enables you to deal in an instant – directly from the charts. You will be able to open, close and edit positions in just a couple of clicks.
Trading charts always feature distinct patterns that technical analysts can use to interpret the behavior of buyers and sellers. These chart patterns can give traders an indication of where the market could go next. As you will notice when you look at a chart, the market will usually move in one overall direction or trend. There are three types of market trends: uptrends, downtrends, and sideways trends.
Facebook stock has lost momentum after the $386 peak in late August 2022.
The short to medium-term Facebook shares prediction is bearish after the trendline breakout which signals an intermediate trend counter-trend.
If the $300 level will hold and the price will show a higher low the uptrend should resume. Otherwise, the next key support level is around $250 and could be a 2022 low for Facebook shares before trending up in the medium to long term towards the $400 price target.
To buy Facebook shares or not?
It is recommended to watch for stocks in the major long-term support area. We should buy Facebook shares at relatively cheap prices (compared to historical values), not expensive prices. Also, have an exit plan for how you will exit a profitable trade. Define how and why you will exit. Since we used to support to get into the trade, you may consider exiting just below a long-term resistance level.
If buying at support, and planning to exit just below resistance, the upside potential should outweigh the downside risk by at least 2:1 or even 3:1. That means that if you buy Facebook shares at $320, you should be reasonably able to get out of the stock at $295 or higher. In an absolute worst case you lose $25 a share, but based on the historical chart it is quite feasible to go up to $50/share or more. This is known as the risk/reward ratio, a key indicator when deciding to buy Facebook shares or not.
With CAPEX WebTrader, you can perform an in-depth analysis of the charts with 90 indicators (including moving average, MACD, RSI, and Bollinger Bands). The platform also supports an interactive trading activity with high-end research tools helping you interpret market data.
Analyst consensus - BUY
The current consensus among 66 polled investment analysts is to buy Facebook shares. The buy percentage consensus is at 83. So analysts seem to be very confident about FB.
- Strong Buy (21)
- Buy (34)
- Hold (10)
- Sell (1)
Facebook shares prediction 2022: $409.03 (+30%)
The 66 analysts offering 12-month price forecasts for Facebook have a median target of $409, with a high estimate of 489.30 and a low estimate of 252.50. This target is around +30% above the current price.
3. Understand the risks and charges
Trading can be seen as riskier than investing due to leverage. But investing also carries a risk – and there is no guarantee that your investments would increase in value, so you could receive back less than you initially invested.
Before deciding to trade in shares, you should take steps to manage your risk. We have courses at CAPEX Academy that take you through risk management and how to mitigate your exposure to risk in the financial markets.
Our costs and charges for trading vary depending on the product that you use to take a position.
Facebook (FB) CFD Trading Conditions
|SPREAD PER UNIT||0.40 pips||LEVERAGE||1:5|
|OVERNIGHT ROLLOVER - LONG||-0.0076 %||OVERNIGHT ROLLOVER - SHORT||-0.0063 %|
|INITIAL MARGIN||20.0000 %||MAINTENANCE MARGIN||10.0000 %|
- Spread represents the difference between ASK price and BID price.
- Future Rollover adjustment consists of the difference in price between expiring contract and new contract as well as the spread of the CFD.
- Swap is the amount credited to or debited from an account where positions are held overnight.
- Inactivity fee represents the monthly amount deducted if no activity is recorded for 12 months in an account.
4. Access the trading platform and place your orders
To buy Facebook shares CFD with CAPEX Webtrader is very easy and intuitive. Opening an online trading account is as easy as setting up a bank account. Here are the steps:
Open an account or log in
First, create an account or log in on capex.com. To open an account, click the "Register" button and complete your details.
Once the platform is accessed, the registration process must be completed in order to operate with real money. Click "Complete the Registration and Start Trading".
To log in, from the CAPEX website, click on "Login".
Deposit funds into your account
To trade with a live account, it is necessary to deposit funds. This is done from the platform itself by clicking on the "Add funds" button:
Also, it is possible to trade on a risk-free demo account with a balance of € 50,000, which is ideal for getting to know the platform and testing trading strategies.
CAPEX offers you different payment methods: debit cards, credit cards, bank transfer, skrill, and more.
It is noteworthy that CAPEX does not charge any fees or commissions for depositing funds.
Look for Facebook shares
To view Facebook shares (FB) real-time price and chart on the trading platform can click on the "Search" icon located in the left panel or by clicking on "Shares" and then select the instrument, in this case, Facebook .
Use the indicators and drawings to analyze the chart
Click the indicators icon and select your favorite ones. There are trend-following, oscillators, volatility, and support/resistance indicators available. To learn how many indicators to use and how to combine then visit the Technical Indicators section in CAPEX Academy.
Set up the order to buy Facebook shares
To buy Facebook shares CFD, click on the "Buy" button and a window is displayed to configure the purchase order:
The number of Facebook shares to be purchased must be entered and it is allowed to set up a Stop Loss to limit the potential loss, and/or a Take Profit to close a profitable position once the Facebook stock reaches a specific price. These orders can be configured based on price, pips, cash value, or percentage.
To proceed with the purchase, click on "Place Order".
However, FB trading does not end here. You will want to check out the next step to make sure you are investing your money as well as you can.
Why Trade Facebook with CAPEX?
- Advanced AI technology at its core: Whether they prefer the web-based and mobile-ready WebTrader or favor the highly popular MetaTrader 5, we make sure investors make effective use of fast and reliable trade execution speeds, complex order and risk management tools, advanced charting options, powerful research tools in collaboration with highly-regarded platforms such as Trading Central or TipRanks.
- Trading on margin: Providing trading on margin (up to 5:1 for individual equities), CAPEX gives you access to the stock market with the help of CFDs.
- Trading the difference: When trading Facebook CFD, you do not buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of the Facebook stock price. Online trading with CFDs is nothing different from traditional trading in terms of strategies. A CFD investor can go short or long, set stop loss, take profit, and apply trading scenarios aligned with their objectives.
- All-round trading analysis: The browser-based platform allows traders to shape their market analysis and forecasts with sleek technical indicators. CAPEX provides live market updates and various chart formats, available on desktop, iOS, and Android.
- Focus on safety: capex.com is operated by Key Way Investments Ltd and is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) (license no. 292/16).
- Global partnerships: CAPEX is proud to be the Proud Sponsor of Juventus, one of the most prestigious football clubs in the world, a football club that has a special place in the hearts of the people of Italy, with a strong legacy and a dedicated community.
5. Stay up to date with the latest news and rumors about Facebook (FB)
Get the latest Facebook Inc. (FB) stock news and headlines to help you in your trading and investing decisions.
History of Facebook
On January 1, 2012, Facebook filed for an initial public offering (IPO). According to the preliminary prospectus, the business was looking to fund $5 billion and had 845 million monthly active users and a website with 2.7 billion daily likes and comments. Zuckerberg would maintain a 22 percent ownership stake in Facebook after the IPO, as well as 57 percent of the voting shares.
The shares were valued at $38 each by underwriters, valuing the company at $104 billion, the highest price for a freshly public corporation to date. Due to high demand, Facebook stated on May 16, one day before the IPO, that it will offer 25% more shares than expected. The IPO was the third-largest in US history, raising $16 billion (behind only General Motors and Visa).
On December 21, 2013, Standard & Poor's included Facebook in its S&P 500 index.
Zuckerberg declared on May 2, 2014, that the company's internal motto would be changed from "Move fast and break stuff" to "Move fast with reliable infrastructure."
Jason Rubin, the CEO of Oculus, handed Facebook's leadership a 50-page vision plan titled The Metaverse in 2018. Rubin admits in the letter that despite spending hundreds of millions of dollars on content for early adopters, Facebook's virtual reality business did not take off as predicted. He also challenged the company to act quickly and boldly in order to beat out HTC, Apple, Google, and other VR competitors.
Mergers and acquisitions
Facebook, Inc./Meta has purchased a number of firms over the course of its history (often identified as talent acquisitions).
In April 2012, it made one of its first major purchases when it paid $1 billion in cash and equity for Instagram.
Facebook, Inc. purchased Onavo, an Israeli mobile web analytics firm, in October 2013.
Facebook, Inc. announced in February 2014 that it would purchase WhatsApp, a mobile messaging service, for US$19 billion in cash and equity. Facebook bought Oculus VR for $2.3 billion in stock and cash later that year after the company released its first consumer virtual reality device in 2016.
The corporation reported in late July 2019 that it was under investigation by the Federal Trade Commission for antitrust violations.
Facebook, Inc. announced the acquisition of game developer Beat Games, which was responsible for one of the year's most popular VR titles, Beat Saber, in late November 2019.
In April 2020, Facebook announced a $5.7 billion deal with Reliance Industries, an Indian multinational conglomerate, to buy around 10% of Jio Platforms, Reliance's digital media and services organization.
Facebook, Inc. announced in May 2020 that it has purchased Giphy for a reported cash price of $400 million. It will work in tandem with Instagram's crew. However, after an examination revealed that the transaction between the two businesses would affect competition in the display advertising market, the UK's Competition and Markets Authority (CMA) stated in August 2021 that Facebook, Inc. might have to sell Giphy. Facebook, Inc. was hit with a $70 punishment.
Following a period of intense scrutiny and damaging whistleblower leaks, rumors of Facebook's plan to rebrand and alter its name began to emerge on October 21, 2021. On October 25, at the company's Q3 2021 Earnings Call, Zuckerberg described the company's social services and how it runs, as well as the company's pivoting efforts to develop the metaverse - without addressing the rebranding and name change. On October 28, 2021, during Facebook Connect, the metaverse concept was unveiled, as well as the name shift from Facebook, Inc. to Meta Platforms. According to Facebook's public relations campaign, the name change represents the company's long-term commitment to creating the metaverse, a digital extension of the physical world enabled by social networking, as well as virtual reality.
A Canadian company that offers big data analysis of scientific literature filed "Meta" as a trademark in the United States in 2018 (following an earlier filing in 2015) for marketing, advertising, and computing services. The Chan Zuckerberg Initiative (CZI), a nonprofit founded by Zuckerberg and his wife Priscilla Chan, acquired this company in 2017 and made it one of their projects. Following the introduction of the Facebook/Meta rebranding, CZI revealed that it had previously chosen to deprioritize the earlier Meta project, that it would transfer its rights to the name to Meta Platforms, and that the project would be sunset in 2022.
*Last Update: December 2021. Source: Wikipedia