Analysis of Facebook share price for trading

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Renewed market activity after reassuring news

24/03/2020 - 14h24

The various financial markets seem to be breathing again this morning as some optimistic news is coming from the health front. Let's look back at this phenomenon together.

Our advice for trading Facebook share

Tip number 1

Figures and statistics on advertising spending on the Internet are of the utmost importance since they represent the bulk of the group's sources of income.

Tip number 2

We will also follow the forecasts concerning the activity of games hosted on Facebook, which have followed a relatively positive trend in recent years.

Tip number 3

We will also monitor the development of new features and technical developments from Facebook in different areas of involvement.

Tip number 4

Figures on the use of different media and media (PC or mobile) can also influence Facebook's activities and therefore its results.

Tip number 5

The group also faces some problems related to the use of personal data and we will therefore monitor events related to these problems but also the implementation of solutions to protect users and reassure them.

Tip number 6

Facebook's development in certain markets that are still closed to it, such as the Chinese market, is also a factor that could influence this action.

Trade Facebook shares!
76.4% of retail investor accounts lose money when trading CFDs with this provider.
Shares from the Facebook Company are among the most recent to be quoted, in 2012. It is now possible to buy shares in this famous social network, or simply to speculate in the rise or fall of their price using CFDs on online trading platforms. Whether you wish to speculate over the short or long term, this stock market share can therefore be profitable.  


General presentation of Facebook:

Who has not heard of the name Facebook? Few people certainly as the Facebook Company is none other than that which launched the famous social network of the same name. This company incarnates the type of internet success sought by numerous internet companies with a number of unique users that passes the one billion mark.

It can equally be noted that, compared to the number of users that this site enjoys, the capital obtained at its introduction on the market enabled an evaluation of $100 per website user. It is therefore not surprising that many Facebook users actually invested in this company from the start, envisaging a constant rise and exponential growth in the number of potential prospects for this network together with the turnover figures over the long term.


The major competitors and partners of Facebook:

The Facebook Group, as you already know, exercises its activities in the social networks sector. In this sector, and following the strong success it has experienced, it has a number of large competitors that exercise similar activities and are quoted on the stock markets, these we will examine here in detail.

Of course, other small companies and start-ups represent possible competitive threats to the social network company Facebook in the coming years but here we have chosen to examine only the major existing competitors.


The major partners of Facebook:

Apart from the professional partners of Facebook we can cite several stock market giants that collaborated with this company in 2016 on the creation of a partnership related to artificial intelligence for the benefits of individual members of society. These companies included IBM, Microsoft, Google and Amazon.

This collaboration is in fact a not-for-profit organisation that has the main objective, as indicated by its name, of undertaking research into the good practise of the use of artificial intelligence which is advancing rapidly nowadays. The results obtained through this research due to the collaboration of these various companies will be published under an open license.


The introduction and quotation of Facebook shares:

Historical data regarding the movements of Facebook shares is still fairly limited as these assets only came onto the market on the 5th June 2012. These company assets were made available through the Nasdaq market where other technological assets are quoted such as Google and Apple.

We can however note that, regarding the rush of investors during the initial public offering, the Facebook Company does attract attention and draw crowds and can therefore make a lot of money over the long term. In fact, over 100 billion of U.S. Dollars were made in that one single day.


Historical movements of the Facebook share price:

A few years after the IPO of Facebook shares on the Nasdaq stock market it has become possible to predict the company’s growth possibilities over the long term. A historical technical analysis of this asset from 2013 to now is particularly interesting as it displays above all the strong growth capabilities of this share price.

On its initial introduction on the stock markets, over-valued expectations led to a slight fall in the share price over the first few hours of this asset’s IPO. However since then it would be fair to say that Facebook shares have more than recovered the numerous points initially lost. This asset did actually reach its historical low point of $18.08 in August 2012 but has just about always been on the rise since then and is continuing to approach the psychological threshold of $150.

We also observe numerous rising and falling micro-movements during this base trend that represent many profit opportunities with a short or medium term trading strategy using CFDs.


Financial and economic history of Facebook:

Here are some of the most important dates in the economic history of the Facebook Company:

With this information, you will find it easier to understand the stock market movements of this asset and the investors’ interest in it.


How to trade Facebook shares: 

Like many Forex traders you will no doubt be interested in learning how to benefit from Facebook shares in order to make profits. Here is our response.  

The best trading tool to use when speculating on Facebook shares is without a doubt the CFDs. Widely offered by the online Forex brokers, CFDs (as with the currencies) enable you to speculate on the  rise, or the fall, on various assets including shares. Before opening an account with a broker you should always systematically verify which assets are available through your broker as not all offer trading in Facebook shares.

Using CFDs, and in accordance with information that you can obtain from the economic news of the group itself, you can make profits whether the share price goes up or down. Of course, it is imperative that to do so you keep up to date with present and future movements of the business concerned. 

One of the advantages of Facebook is its popularity so making it possible to easily find a huge amount of information relative to this company on the Internet.


Some advice for trading in Facebook shares:

It is now possible to speculate on the movements in Facebook Company and try to make a profit by buying this company’s shares. To do so you should enquire through your online bank who can explain how to go about becoming a shareholder in the company and receive dividends. However, although the future growth of this company may seem limitless you should bear in mind that patience is needed if you use this system.

The advantage of Facebook shares is that related events are highly publicised in the specialised media and therefore information on its forthcoming movements is easy to obtain.


The advantages of Facebook shares as a stock market asset:

Since its initial IPO Facebook shares have engendered serious interest among investors worldwide and for good reason. It is undeniable that this asset offers numerous advantages for trading online which we will examine in greater detail here through a summary and review of its major benefits:

The Facebook group has a number of opportunities open to it in the coming years which could enable the company to gain a larger share of the market and increase its profitability. Over the last few years we note a major increase in online advertising by companies. As Facebook’s profitability model is primarily based on this type of revenue it would be safe to say that this company can only benefit from such an increase.

In the online gaming sector the Facebook group still has much to gain as the results obtained over the last few years are consistently positive.


The disadvantages of Facebook shares in the stock market:

As we have just seen, the financial strength and the rather positive future prospects of this company, suggests that this stock market asset is particularly interesting for investors. But of course, this company does not only present advantages and it is also necessary to know its main disadvantages before starting to trade online.

Among the main disadvantages of Facebook shares, we can mention a current lack of effectiveness of the advertisements on the pages of the social network, which is struggling to recruit new advertisers, despite a strong demand.

We can also notice that the Facebook application for smartphones, although it has been praised by the critics for its quality, it generates less revenues than its online version, especially because of lesser follow up of advertising links. However, the users of the social network increasingly prefer smartphones to computers which may eventually lead to lower profitability and increasing difficulties for the company to recruit new advertisers.

Facebook also faces some legal battles, particularly with regards to the disclosure of private information. Even though the company has made real efforts in this regard in recent years, the use of personal data by the social network is still controversial and could have negative repercussions in the future.

Finally, one of the last weaknesses of Facebook concerns its increasingly strong exposure to an increasingly aggressive competition. Maintaining its position as the leader in this sector will depend mainly on its ability to innovate in order to remain constantly on the top of the trend and to offer features that will appeal to the general public.

In conclusion, even if Facebook has to face certain obstacles to maintain its popularity and a rising profitability, the objectives remain reachable and this share counts with a positive feedback from analysis experts. It is however advisable to carefully follow the news about the company by subscribing to a newsfeed or by using a specialized site such as that of your online broker because this company could have a strong reaction to advertising effects.


Facebook and its numerous acquisitions:

Facebook is mainly known for its social network, but the company has very diversified activities, mainly online, thanks to a well stablished acquisition strategy. In fact, this company has bought several companies in the last ten years, for a total amount of approximately 23 billion dollars.

Among some of the more attractive companies acquired by the group, there is of course the WhatApp application, the social network Instagram, Oculus and LightBox, but the list does not stop there. In fact, some years, Facebook has acquired several different companies during the same year, we invite you to discover here the whole list of Facebook acquisitions in detail, so that you can have a good overview of what has the Facebook empire become.

Even if not all of these companies have a very profitable business model, most of them are very successful and can fuel the profits of the American group. You can analyze the results and news of these entities as part of your fundamental analysis of Facebook shares.

Of course, we also advise you to carefully monitor all future purchase transactions done by Facebook in the future which could have a direct and immediate influence on the price of this security.

How to trade on the Facebook share price?

Take position now on the Facebook share price and trade whatever the direction of the trend using CFDs available through CFD brokers.

Trade Facebook shares!
76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.