Meta Platforms is the company formerly called Facebook, Inc. – renamed, which owns Facebook, Instagram, WhatsApp, and a host of other social media and technology outlets that are among the largest companies globally by market valuation. Is Meta a good stock to buy in 2024, though?
Below, we detail some tips on how to invest in Meta Platforms. Deeper into the post, we provide a step-by-step guide on how to buy stocks in Facebook.
A Short History of Meta Platforms
What began as a website for connecting people from Harvard University expanded and spread like wildfire around the world. Before we go on to learn how to invest in Facebook, let’s do a quick recap of some key points in its history.
- 2004: Mark Zuckerberg launched Facebook with his classmate, Eduardo Saverin. It was developed to enable students at Harvard University to connect and network.
- 2006: Facebook becomes available for everyone to use.
- 2012: Instagram was purchased by Facebook in April for $1 billion. Then in May, Facebook goes public with an Initial Public Offering (IPO).
- 2013: Facebook is added to the S&P 500.
- 2014: WhatsApp was sold for $19 billion.
- 2021: Facebook has rebranded itself as Meta Platforms, a symbolic move toward the company’s future of metaverse development.
Meta’s Earnings
In other words, when you buy shares in Facebook, you become a literal part-owner of the company. Therefore, to decide on whether to invest in Facebook, among other things, it’s important to take a peek at the fundamentals of the company: what one is and how it works and earns an income.
Below are some important facts from the company’s earnings report for third quarter of 2023, which we have highlighted in the table.
| 2023 | 2022 | % Change YoY | |
|---|---|---|---|
| Total Revenue | $34.15 billion | $27.71 billion | 23% |
| Operating Income | $13.75 billion | $5.66 billion | 143% |
| Earnings per Share (EPS) | $4.39 | $1.64 | 168% |
| Daily Active People | 3.14 billion | 2.93 billion | 7% |
| Monthly Active People | 3.96 billion | 3.71 billion | 7% |
Source: Meta Platforms – Third Quarter 2023 Results
Meta Stock Review
For a long time, Mark Zuckerberg, the founder of the leading social networking website Facebook, never intended to take it public and denied several buy-out offers.
The number of its active monthly users when it went public in 2012 was 845 million, a record number at that time for the valuation of a new public company by its underwriters, who valued it at more than $100 billion.
TradingView: Previous results do not always predict future performance.
After some scandals and events in 2018, Meta Platforms saw its share price fall by a drop of 26%, then crawled up progressively over time. Amid this big fall that was happening right at the beginning of the COVID-19 pandemic in 2020, shares of Meta popped by more than 160% within three years ending on 31 December 2021.
But in 2022, the fortunes changed. In a tight economic situation with high inflation, rising interest rates, and uncertainty on how Meta would fare in the future, shares fell by 64%—much steeper than the S&P 500’s decline of 19% over the same period—reaching their lowest in seven years.
This was because adverse economic conditions prompted advertisers to rein in spending, which consequently hit Meta’s earnings. Also, for the first time in the history of the company, at the beginning of the year, the number of daily active users decreased. However, leaving everything else aside, what worried investors the most was how much money Zuckerberg and Meta were spending on the metaverse.
How Much Would $1,000 Invested in Facebook IPO Be Worth Today: If one had invested $1,000 into the 2012 IPO of Facebook, a shareholder would have gotten 26 shares at its IPO price of $38 each shares. The value of that position at market close on 22 November 2023, would be $8,878.74.
In 2022, Reality Labs, Meta’s metaverse division, lost $13.7 billion as opposed to $10.2 billion in the previous year. Although revenue was very flat, rising costs spooked investors about how much money was being lost.
However, better economic conditions and more income helped Meta get its share price back to recover a lot of the loss experienced in 2023, although it is still way off the all-time high as of now.
Though higher revenues and lower costs have somehow masked the fact that Reality Labs remains in the red. Such a business segment lost $11.5 billion for the first nine months of 2023, over 20% worse than a year ago.
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Is Meta a Good Stock to Buy?
Like any investment, this question can only be answered by yourself. You have to decide what you are trying to accomplish with your investment and do the research for yourself before deciding to invest.
We just saw the amount of money Meta was investing in the metaverse. All in all, Reality Labs lost a total of $42 billion from the start of 2020 to 30 September 2023. What a crazy sum of money.
People will say it’s money well spent and a great idea from Zuckerberg when the metaverse works. This is going to be a expensive mistake, though, in case it fails.
Looking past the black hole that is Reality Labs, one metric that jumps out in Meta’s earnings isn’t the financial number of people that use the company’s family of applications. The average number using at least one daily stands at 3.14 billion people, while every month, that figure reaches 3.96 billion people.
That means there are quite literally almost 50% of the people on Earth using one of Meta Platforms’ apps each month for a global population of about 8 billion.
It then makes sense why Meta seems to be the darling of advertisers and can command 18% of digital ad dollars in the world. The only other company claiming this kind of global reach would be Google.
If Meta can maintain a significant user base, it will have the opportunity to benefit from an increased level of global digital advertising expenditure, By 2028, it is expected to have increased from $694 billion within 2023 to $900 billion.
How to Buy Facebook Stock (META)
1. Open a Brokerage Account
You must make your purchase through a brokerage account, as this will manage the transactions for purchasing Facebook stock or any other kind of stock. Comparing brokers, who all offer different services, different fee structures, and different investments to choose from, will provide the right one for you.
2. Select an Account That Fits Your Needs
Secondly, select the type of account you wish to open after selecting the appropriate brokerage platform. Your choice of account should be in line with your investing goals.
- Retirement accounts: Individual retirement accounts – IRAs – provide the opportunity to save for retirement along with tax advantages. Just a heads up: in addition to paying the required taxes, you will be penalized 10% if you withdraw money before you turn 59 ½ years old.
- Taxable accounts: There are no special tax benefits of any kind with the accounts in taxable brokerage. You can pull the money out whenever you’d like and for any reason. You now have the flexibility to accumulate general wealth.
3. Calculate Your Facebook Spending Amount
A couple of things to think about before you proceed with buying stocks outright: To be able to determine how much money to place on Facebook, consider the following:
- How much money can you afford to invest? Before investing in a piece of Facebook, first consider your other budget needs. Once the bills are paid, make sure money for retirement is ready and an emergency fund is full.
- How much does FB cost? Like all stocks, the price of Facebook’s shares consistently changes. One can purchase a single share of Facebook, or they can be purchased in part. Companies like Charles Schwab, Fidelity, Stash, and Robinhood allow their respective investors to purchase fractional shares.
- What’s your investing strategy? You could plunge the whole thing into Facebook or you can dollar-cost average. In other words, you would invest the same amount of money into it periodically without caring about what its current price is. Applying a dollar cost average reduces the average cost per share and lessens your exposure to price fluctuations.
- What about your other investments? What role does Facebook play in your overall financial plan? Will you be investing in Facebook for the first time, or do you already own a number of other large-cap stocks? A healthy portfolio can be achieved by ensuring that it is diversified and includes a range of industries and company sizes.
4. Determine the Type of Order and Place It
In order to purchase Facebook stock only if the price falls below a predetermined level, you can use limit and stop orders or ask your broker to buy it now.
Facebook is listed on the Nasdaq exchange. The company’s shares are available for purchase and sale Monday through Friday from 9 a.m. to 4:00 p.m. ET. The Nasdaq allows for pre-market and after-market trading if your brokerage platform allows it.
Pre-market hours for Nasdaq are from 4:00 a.m. to 9:30 a.m., and after-hours trading is from 4:00 p.m. to 8:00 p.m. ET. Any orders placed before or after, your broker allows trading will be considered to be executed at market open.
5. Analyze the Performance of Meta
You will also want to recheck from time to time your investment in the Meta company stock.
You can compare the performance of stocks over time by using the concept of annual percent return. It enables you to get a number that can be compared with others to see how the investment in META is faring.
Compare how Facebook has performed versus some benchmark indexes, such as the Nasdaq 100 or S&P 500. This gives an idea of how well Facebook has done in comparison to the general stock market.
As Facebook is a publicly traded company, it must submit the quarterly Form 10-Q with financial condition and performance information, as well as the annual Form 10-K report.
This information is primarily offered through its investor relations Internet site; it is also available through the SEC database. If reading these reports seems like work, you at least can look at professional analysis of these reports from sites such as Morningstar. You can decide if this stock is suitable for your investing goals based on the information provided by Facebook and expert analyses of that information.
How to Invest Just $50 in Facebook
Besides investing in more than 4,500 companies and over 200 ETFs, an owner of an Invest.MT5 account can buy options to buy fractions of shares in 700 of the world’s largest companies, with Meta Platforms being one of them!
How to Sell Meta Shares
A Guide on Selling Meta Stocks Though “buy-and-hold” might be the best investment strategy, sometime in life, you may need to sell some of your Facebook shares. Selling stock is parallel to buying shares.
Open the online trading platform and enter the Facebook ticker, the quantity or dollar amount of the number of shares you want to sell. There are now various types of sell orders, just like there are purchase order types.
The first is a market order. You might owe capital gains taxes on the amount your Facebook investment has made. The amount would be relative to the income you report for the year and how long you’ve owned Facebook stock. A professional tax professional or CPA can guide you on how capital gains taxes may apply when you sell your META stock or any other investment.
Invest in Facebook using an ETF or index fund.
You can include this company in your portfolio by simply purchasing their stock. Purchasing shares of index funds, or ETFs, is an additional method of investing in Facebook. You can access both through your online brokerage.
These funds pool many different stocks into one fund. That means they’re much lower risk than buying individual stocks in individual companies. Instead of your hope riding only with Facebook, you might have a hundred or even a thousand different companies with these sorts of funds. This way, the chances for overall growth are larger, but not all your money is riding on one company.
Several index funds thus have Facebook in them. By S&P 500 index weight, it ranks among the top ten companies. So, if you buy an index of the S&P 500, you will take a tremendous amount of exposure to META simultaneously, both diversifying and protecting your investments.
FAQ – Investing in Facebook
Date of Facebook’s going public:
On May 18, 2012, Facebook became a publicly traded company through an IPO. The estimated collection was around US$16 billion – which ranked as the third-largest in the history of US IPOs.
What Was Facebook IPO Price?
Facebook’s IPO share price was $38.
Who Underwrote Facebook IPO?
Leading the IPO of Facebook were the lead banks Morgan Stanley JP Morgan, also Goldman Sachs, along with 28 other banks that were underwriters in the offering.
On which stock exchange is Facebook listed?
It trades on the Nasdaq under the name META; it was formerly listed as FB when it was called Facebook.
Does Meta pay dividends?
Currently, Meta Platforms does not pay any dividends and has not given any indication about paying a dividend soon.
How many shares does Facebook have?
2.22 billion Class A and 350 million Class B shares of Meta were outstanding as of October 20, 2023.
Can I buy Facebook shares in the UK?
It’s true that you can buy Facebook, also known as Meta Platforms. Yes, you can. You can easily do this by opening an account with any brokerage firm that will give you access to the US stock market—for example, Admirals.
With 2 billion daily users and $120 billion in yearly sales, Facebook, now Meta Platforms, Inc., is a global giant. Here’s how to buy Meta stock for your portfolio.
