How To Buy Facebook (META) Stocks & Shares

Update 10 June: Facebook’s parent company, Meta Platforms, Inc. has officially changed its stock market ticket symbol to META from FB.

The move reinforces Meta’s transformation to a holding company that owns a wide range of technology applications, from its previous image that focused on being the owner of the Facebook social media platform.

Meta CEO, Mark Zuckerberg, has made conquering the so-called “metaverse” – a virtual reality space in which users can interact with a computer-generated environment and other users – a core corporate goal.

Earlier this month, Meta’s chief operating officer, Sheryl Sandberg, announced that she would be leaving the business this autumn after 14 years.

Meta’s share price stood at £147.20 ($184) at the close of trading on 9 June.

Shares in Meta, owner of Facebook, WhatsApp and Instagram, have risen by 17% from $174.95 (£140.0) to $204.25 (£163.4) despite a mixed set of first quarter results.

Meta’s numbers were eagerly awaited after the shock of its last quarterly results in February, when it announced its first-ever drop in Facebook daily user numbers. The resulting 26% fall in its share price was a record daily loss for a US firm.

The first quarter revenues of $27.9 (£22.3) billion reported yesterday were below analysts’ expectations of $28.3 (£22.6) billion, according to US market research site, Zacks. The quarterly revenue growth of 7% was the lowest in a decade, compared to a 48% growth in first-quarter revenue in 2021. 

Meta pointed to loss of revenue in Russia as a headwind to growth, together with increased competition in North America and Europe and the impact of high inflation on advertising budgets.

However, Meta’s first-quarter earnings per share of $2.72 (£2.18) comfortably surpassed the market consensus of $2.54 (£2.03). Although Meta has scaled back expenditure for 2022, the earnings per share was also enhanced by a record $45 (£36) billion of share buy-backs in 2021.

There was particular scrutiny of Meta’s user numbers after the fall in the previous quarter. However, Facebook daily active users of 1.96 billion for March 2022 marked a return to growth of 4% year-on-year. 

That said, the Meta products continue to face stiff competition from the likes of TikTok, with Meta investing significantly in Facebook Reels because of the growth in the popularity of short-video formats. 

It’s been a difficult year for Meta shareholders, with the stock having lost half its value. It remains to be seen whether Meta’s significant investment in the metaverse, a virtual reality platform, will be sufficient to see off challenges to the popularity of its social media platforms.

Here’s what you need to know about buying and selling Meta shares.

Note: investing in shares comes with no guarantees. When buying company shares, it’s possible to lose some, or even all, of your money.

That said, over the long term – a minimum of five years (preferably longer) – it’s possible for share-based investments to produce superior returns to those available from low interest-paying deposit accounts, especially once inflation has been factored in.

Why own stocks?

It’s worth asking yourself why you want to buy shares. Are you looking for capital growth, income from dividends or a combination of both? Your investment objectives will determine what type of shares you invest in, whether high-growth technology shares or more defensive companies with a reliable dividend stream.

Most investors look for sound fundamentals, including a track record of consistent earnings growth, a strong market position or products or services with future growth potential. These should provide a solid platform for future share price growth.

That said, other factors such as takeover rumours can drive up a company’s share price. Investors may also be attracted by recovery plays, with a depressed share price providing the potential for a rebound.

How to buy stock

Once you’ve decided which company to invest in, there are several steps to buying shares.

1) Open an account

Whether you’re a seasoned share trader, or new to stock market-based investments, you’ll need to open an account with a regulated brokerage to buy shares in Meta.

Stockbroking is a competitive market place and services for DIY investors come in a range of guises – from online investing platforms run by some of the biggest names in financial services, to investment trading apps that work off your smartphone or tablet.

Before opening an account, bear in mind the following:

• Keep your ultimate financial goals in mind
• Be prepared to ride out stock market ups and downs
• Aim to keep trading costs to a minimum
• Remember that share investing can prompt tax charges, for example, when selling part of your portfolio, unless you use a tax-efficient wrapper such as an ISA

And before buying any shares, it’s worth asking yourself these questions:

• Should I take financial advice?
• Am I comfortable with the level of risk in question?
• What’s my investing budget?
• Can I afford to lose money?
• Do I understand the company in which I’m looking to invest?
• Am I protected if my platform provider/adviser goes out of business?

2) Where is Meta traded?

The ticker symbol for Meta Platforms Inc is FB, although it will change to META in the next few months. It is listed on the technology-focused Nasdaq exchange in the US, which is open for trading from 9.30am to 4pm (Eastern Time). You should be able to buy US shares through most brokerage accounts.

You should be able to buy US shares through most brokerage accounts. Buying shares in US dollars incurs a foreign exchange fee (typically around 1%) unless you fund the purchase from a US dollar account. 

Most brokerages also charge a slightly higher transaction fee for buying US, rather than UK, shares although it’s worth comparing the fees charged by different brokers if you plan to trade US shares regularly.

You will be asked to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).

As with UK shares, any profit on US shares will be subject to Capital Gains Tax, unless you hold the shares in an Individual Savings Account or Self-Invested Personal Pension.

3) Do your research

To find out more about Meta, visit the company’s online investor relations page. 

It’s also worth comparing Meta’s valuation to other comparable US technology companies. One way of doing this is to look at the relative price-earnings ratios – shares trading on a high price-earnings ratio have high expectations of substantial future growth. 

Another useful research tool is brokers’ 12-month share price forecasts, which are available on financial websites. There are currently nearly 50 brokers following Meta shares, and their price forecasts give an indication of the upside and downside potential of the Meta share price over the next year.

4) What’s your investing strategy?

People tend to invest in one of two ways: either with a lump sum purchase, or via smaller, steadier amounts over time.

The latter method is often referred to as a means of ‘pound cost averaging’, a stock market hack which helps you pay less per share on average over time in falling stock markets. Rather than waiting to build up a lump sum, it means an investor’s money can be put to use in the market straightaway. However, drip-feeding your investment may sacrifice capital growth if the share price is rising and you will also pay more in share-trading fees.

5) Place an order

Once you’re ready to buy shares in Meta, log in to your investing account or trading app. Type in Meta’s ticker symbol (FB) and the number of shares you want to buy or the amount of money you’re prepared to invest.

Many brokerages also allow you to add a ‘stop loss’ once you have bought the shares, which allows you to limit your losses if the share price falls. For example, if you buy shares at £10, and set a stop loss of £9, your shares would be sold if the share price falls below £9, limiting your potential loss to 10%.

6) Review Meta’s performance

Whether your share portfolio is crammed full of companies or holds only a handful of stocks, it’s vital you review how each component is performing on a regular basis: monthly, quarterly, or annually.

Doing this gives you the opportunity to review performance and ask if any adjustments to your holdings are required – to maintain the status quo, buy more stock, or sell existing shares.

How to sell stock

At some point, you will want to sell your holdings. To do so, log in to your investing platform, type in the ticker symbol and select the number of shares you want to sell.

Note that if you’ve made a substantial profit, you may be liable to pay Capital Gains Tax (CGT) when you come to sell your holdings, especially if your shares were held outside of a tax-exempt wrapper such as an Individual Savings Account or a Self-Invested Personal Pension.

The CGT tax-free allowance for the tax year 2022-23 is £12,300. Find out more here about CGT rates and allowances. 

How to invest in Meta via a fund

Investing directly in individual stocks can be an absorbing and, hopefully, profitable experience. It may also qualify you for shareholder perks specific to the company in question.

Investing directly in individual companies can, however, leave you vulnerable to stock market volatility and unforeseen swings in share prices. 

That’s why financial experts recommend that most people invest in a diversified mix of asset classes and funds that hold a ready-made portfolio of upwards of fifty different company shares.

Being a major component of the Nasdaq index, Meta is found in many global and specialist technology funds and investment trusts, as well as tracker-style Exchange Traded Funds.