Did you know that Facebook has approximately 2.8 billion monthly active users? The network is arguably a leader in the social media industry. On top of that, Mark Zuckerberg’s company owns two other popular platforms — WhatsApp and Instagram.
Reflecting the company’s stable growth, the Facebook share price has almost doubled in the past year. Plenty of investors looking have already benefited from this steep increase. The good news is you could join them any time.
So, how to buy Facebook stock?
We’ll discuss the social media platform’s history and recent performance, the pros and cons of buying the stock, and of course, how to invest in Facebook. So, let’s get started!
About the Company
In February 2004, Harvard student Mark Zuckerberg created a social media platform while sitting in his dorm room. Initially called The Facebook, the network was intended to connect Ivy League students.
To everyone’s surprise, Zuckerberg’s little experiment kept growing, and in 2006 he extended the network beyond educational institutions. Facebook quickly took over the world and became a global industry leader. The company’s annual revenue jumped from just $153 million in 2007 to a whopping $86 billion in 2020.
One of the things that have helped Facebook thrive is the constant introduction of new features. Messages, timelines, reactions, comments, groups, marketplace, live streaming have all been well-accepted. With the site’s growing list of functionalities, revenue streams have multiplied, along with the Facebook stock value.
Zuckerberg was also quick to respond to the increasing competition, acquiring companies that offer similar services. In August 2012, Facebook bought Instagram for $1 billion. A little more than 100 million people were using the photo-sharing platform at the time compared to today’s one billion registered users.
In 2014, Facebook added WhatsApp to its range of products. The $19-billion acquisition eliminated the service as a rival to FB Messenger and further boosted the Facebook stock price.
The company has also been gradually moving towards virtual reality. In the fourth quarter of 2020, it introduced Facebook’s Oculus Quest 2 VR headset. The $299 device was one of the first affordable VR headsets through which the technology can be mainstreamed.
Facebook Stock Performance
Marking another company’s milestone, Facebook decided to open its doors to stock investors and went public in 2012. The initial public offering (IPO) took place on May 18, with a single Facebook stock valued at $38.
After falling significantly during the first months of trading and reaching a bottom of $17.73 on September 4, 2012, the shares rose sharply in 2013 and kept climbing throughout the years to date. At the time of writing, the Facebook stock prices are hovering around $290 per piece.
The Covid-19 pandemic has shown that only strong companies can stand unexpected events of such scale. Since the coronavirus outbreak in March 2020, the stock price of Facebook has hiked by an impressive 98%, exceeding analyst expectations. No doubt, this makes the Facebook stock market investment even more attractive.
Should You Buy Facebook Shares?
Facebook’s stock price history is a success story you wish you took part in from the very beginning. Is it too late to join now?
There is no sign of the recent growth trend slowing down. If you’re looking for a long-term investment, you may benefit from learning how to buy Facebook stock.
Keep in mind, though, that Facebook is in the same category as other high-profile tech companies, including Amazon, Apple, Netflix and Google. These so-called “FAANG” stocks grow rapidly but experience some significant share price swings.
By looking at one of the major evaluation measures, we can assume that the Facebook stock price is also slightly volatile. The company’s beta figure is 1.06, where anything above 1.0 shows higher volatility than the overall market. Although Facebook’s stock tides are not that drastic, some investors don’t like the pressure of seeing prices constantly drop and rise.
Also, if you choose to invest in Facebook, note that the company doesn’t pay shareholders a dividend. Instead, all profits are reinvested into the company. But this regular input into the business results in revenue growth, and hence, a higher value for your shares.
How to Invest in Facebook Stock
If you’re now wondering how to buy Facebook stock, pay close attention to the details given below. You’ll learn the steps towards becoming an official Facebook shareholder.
Choosing an online broker
To buy FB stock, you must first find a suitable online broker. You may come across many platforms that don’t support a Facebook stock investment because they don’t offer access to the NASDAQ exchange. So, first on the list of considerations is the broker’s market coverage.
The account requirements and commissions involved are also factors that should affect your decision. Some brokerage firms offer attractive additional features and investment tools but charge every single trade. If you’re looking to buy FB stocks off and on, fees can rack up and even exceed your profit. So, in this case, your best bet is to find a commission-free day trading platform.
The broker’s reputation should also be taken into account when buying Facebook shares, as the safety of your funds and personal info should be of utmost priority. Browse the internet for trading platform reviews and trust only brokers with a proven track record.
Opening a brokerage account
After choosing an online trading platform, you should open an account. The process is relatively standard for most brokers and includes the following steps:
- Fill in an application form: You’ll have to provide certain personal data that serves to prove your identity and residence. This typically includes name, date of birth, address, Social Securities Number (SSN), etc.
- Get your account verified: For this purpose, the broker may also ask you to provide a photo of your ID, passport, or driver’s license.
- Fund your account: To start buying Facebook shares, you will need to deposit money to your now active account. Note that some brokerages have a minimum deposit requirement. Check beforehand if that fits your investment budget.
And voila! All you have to do now is buy the stock. Type in the Facebook ticker symbol FB, select the number of shares you want to purchase, press the ‘buy’ button, and your order will be executed.
So, is Facebook a good stock to buy? Although like any other company, Facebook has had its fair share of failures and downtime, it remains arguably the most successful social media platform. The company has posted significant revenue gains in the past months while also playing a huge role during the ongoing global pandemic by connecting millions of people.
You can invest in FB stocks if you are looking for a short-term investment. Just bear in mind the shares are slightly more volatile than the overall market. As a long-term investment, Facebook can also be a good bet, as the shares’ value has almost doubled in a year.
Now you know how to invest in Facebook, but don’t stop expanding your knowledge and researching the stock market trends and projections. A successful equities trader is always up-to-date and even a step ahead of the events that may affect their investment.
The Facebook ticker symbol on NASDAQ is FB.
Facebook reports its fiscal year-end on December 31.
No, shareholders don’t get a Facebook dividend.
Strategists at Goldman Sachs – one of the biggest investment firms in the United States – believe that Facebook stock is not overvalued.
As of March 19, the stock price of Facebook is $278.26, which is 1.90% down from the previous day.
Yes, if you don’t mind the natural volatility of tech companies (FAANG) stocks. What you should keep in mind, though, is that FB doesn’t pay dividends but reinvests into the company instead. So, if these two factors don’t bother you, you’re all ready to invest, especially now that you’re familiar with how to buy Facebook stock.