A Beginner’s Guide To Buying Facebook Stock. Suffice it to say that Facebook (FB) has been fluctuating over the last few years, as has its stock market price. Since its initial public offering in May 2012, it’s remained a high-profile company that constantly embraces the general public image.
A key member of the famous FAANG group of tech industry superstars, including Amazon (AMZN), Apple (AAPL), Netflix (NFLX), and Alphabet (GOOG), Facebook has attracted both retail and institutional investors. Held on a large scale.
Its shares have grown unusually strong and relatively smooth over the years since its IPO, but it has been marked by shareholder concerns about data privacy scandals and antitrust investigations. Is. Still, Facebook shares have recovered, reaching all-time highs within the fall of 2020.
A Beginner’s Guide To Buying Facebook Stock
Facebook has become one of the largest and most well-known tech companies in the world.
Since its IPO in 2012, the company’s shares have risen sharply, and reached all-time highs by the end of 2020, despite some roadblocks.
If you opt to shop for FB shares, you’ll easily do so using your broker or through your financial advisor.
The Year Of Facebook Is Very Bad.
Of course, the social media giant was not immune to problems, and he came to the fore in 2018. Facebook’s handling of user privacy and fake news has been a source of serious concern for years, with the company’s implicit role in allowing the site to be used by criminals and terrorists, and the massive use of user data. Violation
Facebook has faced its most severe response, helping the now inactive British political consulting firm Cambridge Analytic to mine data and exploit millions of user-profiles during the US presidential election season and political advertisements in the UK. Have been misused to target. Bridget Referendum Campaign
Partly as a results of this personal data scandal, Facebook issued low guidance for advertising revenue in its July 2018 income statement , which dropped the company’s stock by quite 20% at one point. In fact, it was the largest loss of market value in the history of the US stock market, with a loss of over 100 billion.
How To Analyze Facebook – Buying Facebook Stock
Despite all these worries, a strong case can be made that the long-term outlook for the company remains positive. Such a case depends on how the company and its stocks are analyzed.
With this guide, beginner investors should have a better idea of how to deal with potential losses and what to look for when considering investing in Facebook (FB) and similar stocks. Entering the stock market can be scary, but every experienced investor was once a beginner.
Before buying any stock, investors should exercise due diligence to ensure that the company and the stock have the potential to perform well. Careful analysis can include various forms of analysis, the most basic being fundamental analysis and technical analysis.
In fundamental analysis, the investor evaluates the intrinsic value of the stock by considering the general economy and industry conditions, also because the company’s finances and management.
Technical analysis uses statistics that include past stock prices and volumes. Instead of looking at a company’s intrinsic value, technical analysis focuses on identifying current and future stock price patterns and trends.
Basically, investors should research the company’s finances. This can be found in its latest SEC filing. The company’s website should have an investor relations page. Financial sites such as our own Investopedia also provide company-specific information.
To make a case for buying Facebook stocks, the investor must analyze the growth in advertising revenue, including mobile growth, usage trends, risks to operations, and Outlook and guidance.
Also look at profit margins, total revenue, and monthly active subscribers (MAU) trends. Are these numbers rising , down, or sideways?
Due to someone’s diligence and relief from the decision to buy the stock, the investor must determine that the current price is the appropriate entry point.
analy fundamental analysts calculate valuation metrics to determine whether a stock has a low price (when the entry price is most attractive) or a high price (the price falls before the investor buys the stock) Want to wait). The cost-to-earnings ratio (P / E ratio) is a common diagnostic metric, but there are many others.
The P / E ratio for Facebook is 30.5 as of January 21, 2021. In isolation, it doesn’t tell the investor much. However, if it is compared to historical or industry P / E, it can determine how the stock is valued compared to its trends.
Another way to see if a stock is at a good entry point is to look at its historical stock chart trends. Technical analysis looks at different aspects.