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Evolution of Facebook Shares on the Stock Market

✴️ A member of the GAFA group, the Facebook stock experienced a chaotic stock market trajectory ten days after the IPO, accompanied by an immediate decline in Facebook stock.

✴️ In September 2011, the price of a Facebook share reached an all-time low. Step by step, the company later managed to survive this difficult period by capitalizing on its business model and attracting advertising and managed to become a valuable and extremely popular asset among investors.

But if you are interested in buying Facebook shares, it is important to know the situation surrounding this company ...

So keep reading!

✴️ In 2018, Facebook was unfortunately in the spotlight due to the Cambridge Analytica scandal.

He used the data of about 50 million users, without their consent, for very well-targeted purposes, especially related to the 2016 presidential election, won by Donald Trump. CEO Mark Zuckerberg has been called to account before the United States Congress.

Following the revelation of the case, which had a resounding impact globally, but also on the share price of Facebook, could the purchase of Facebook shares on the online capital market be risky in the medium and long term?

✴️ The coronavirus pandemic also had an impact on Facebook's actions, but they not only recovered losses, but also recorded new all-time highs.

Although it is difficult to predict what might happen, you will still find some answers about FB's situation.

Facebook 2021 results


Recently, Facebook presented the results for the first quarter of 2021.

Earnings per share (EPS): $ 3.30 versus $ 2.33 per share estimates;
Revenue: $ 26.17 million, compared to an estimated $ 23.630 million;
Daily active users: 1.88 billion;
Net profit: $ 9,497 million. This represents an increase of 93.7% compared to the profit obtained in the same period last year.

Facebook Stock Chart - Technical Analysis

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➤ However, in October 2018, the trend line was broken, generating a downward trend, which caused the price of Facebook shares to fall by more than 40% in less than 6 months. This was a consequence of the Cambridge Analytica case, as we shall see later.

➤ The price continued the upward trend, but it was interrupted by the situation generated by coronavirus, with a decrease of almost 40%. After that, the price rose again, reaching an all-time high of $ 331 per share in April 2021.

➤ The black box indicates the period in which the price was in a side range. It was a period of instability caused, among other things, by the closure of Donald Trump's social media accounts following the assault on the Capitol.

Key Levels of Facebook Stock Market Shares

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As can be seen in the daily chart of Facebook shares, in just three months the price increased by 30%, marking a new all-time high of about $ 331 per share.

Following the publication of the financial results for the first quarter of 2021, the price increased significantly on the stock market. However, the next day began to decline to its previous high, coinciding with the 38.2 Fibonacci retracement level. That's why some analysts set the target price for FB shares 20% higher than it currently is. Can this be considered a good time to invest in Facebook shares?

The price of a Facebook Stock after the Cambridge Analytica Scandal
To better understand the recent price action for FB shares, let's take a look at the price of a Facebook share since the Cambridge Analytica scandal.

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Following the scandal in March 2018, the price of Facebook's stock fell sharply, with a gap widening and a large red candle, losing more than 13% of its market value in just one week, thus registering, as a performance, the third the weakest week to date.

Facebook's market capitalization fell by more than $ 75 billion in a single week.

A few months later, FB shares rose to new highs of around $ 218, as if this were just an anecdote.

However, in the early summer of 2018, Facebook is again hit by a scandal following an expansion of the Cambridge Analytica investigation by the FBI, the US financial authority - SEC, the Department of Justice - DOJ and the Federal Trade Commission - FTC.

In a single week, Facebook's share price fell by more than 20%, a larger drop than in March.

In order to decide whether to invest in Facebook shares, you should not only follow the evolution of prices, but also analyze whether it is a consistent company.

Buy Facebook Shares in 2021

As mentioned above, FB remains extremely financially stable and generates profits on a regular basis.

At its core, its business model is undisputed, at least so far.

✔️ Facebook is a profitable and profitable company with a low level of low debt and a high cash flow.

The downside is that it has become the scapegoat for political power following the Cambridge Analytica case because it has probably crossed the red line when it comes to managing the privacy of its users' personal data by using it without permission.

From a technical point of view, it is necessary to approach with caution the purchase of Facebook shares on the stock exchange, at least in the short term, but, from a fundamental point of view in the long term, the purchase of Facebook shares does not seem particularly dangerous.

This market correction may be an opportunity to buy Facebook shares at a better price when they return to growth.

The situation of the Facebook company after coronavirus - Results

Facebook, the company that earns the most advertising revenue, reported revenue of $ 84,169 million in 2020, up 21% from the previous year.

➨ Facebook reported profits of $ 24,108 million, up 58%, and the company also reported earnings of $ 3.88 per share;

➨ Total revenue increased 22% to $ 85,965 million;

➨ The number of active users per month increased by 12%.

"We had a strong end to the year as individuals and companies continued to use our services during these difficult times," said Mark Zuckerberg, founder and CEO of Facebook, after presenting the 2020 results.

➨ The results for the first quarter of 2021 exceeded the estimates.
 
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