Facebook, the most well-known American technology company that operates a social media platform. More than 500 million people use Facebook, making it the world’s largest social network. In addition, it has more than 1.8 billion monthly active users as of December 2017, making it one of the most popular websites globally.
Though there have been concerns about data privacy and their algorithm being too powerful, investors have bought up shares in Facebook since they opened back in 2012. In fact, according to Forbes recent report on Facebook’s stock performance with a detailed analysis of earnings and stock price from 2010-2017, shares were trading at $170 per share as of December 29th, 2017.
Facebook stock is one of the biggest investments any individual or firm can invest in, find out more on buystocks.co.uk.
To learn more about why Facebook is a must-invest, check out the 5 reasons below.
- It’s only growing!
- Their product line diversity is pretty telling about their growth prospects
- Their recent changes have been a boon to their stock price
- Their recently announced stock split will lead to even more growth
- They have a solid balance sheet for any investor
It’s only growing!
Facebook grew by 85% in 2017, which was higher than any other company on the 25 best-performing stocks of 2017. With its increased user base, increased revenues, and earnings for both 2016 and 2017, along with revenue growth expected to continue into 2018, posting these impressive numbers will be essential to continue making money off Facebook stock.
In an article posted on Statista, Felix Richter stated that “despite being shrouded in controversy over its (mis)handling of user privacy and its questionable role in political manipulation in the United States and abroad, Facebook continues to grow. By the end of 2020, Facebook’s monthly active user base had grown to 2.8 billion users.”
Their product line diversity is pretty telling about their growth prospects.
With almost 2 billion active individuals each month, it’s no wonder that Facebook has a tremendous potential to increase ad revenue anywhere on this list of industries. Not only does this potential help to drive their share price upward, but it gives investors a great indication of what to expect in the future.
Facebook currently operates three main divisions: News Feed, Instagram, and WhatsApp. The news feed helps users see their friends’ updates from their social media accounts, while the other two divisions help users access various messaging apps. The WhatsApp division recently passed a billion monthly active users in 2017, which shows how popular this division has become.
According to BusinessInsider, a Facebook spokesperson confirmed that the leaked privacy data had been scrapped due to a vulnerability that the company patched in 2019. While its data privacy issues have been well-documented, Facebook’s growth has helped them carve out a niche for themselves within the ever-growing market for social media.
Their recent changes have been a boon to their stock price
Facebook has taken a few steps to make sure that the users information stays within the guidelines set by the government. In addition, recently announced plans will help to bring more revenue to Facebook. Furthermore, their number of actual users continues to grow, which will only help them stay relevant in this new age of social media networks.
In January 2018, Facebook announced that it would start using a quality content standard for photos and videos posted on the platform. This will block potentially inappropriate content from being shown on Instagram and WhatsApp. This is a necessary step for Facebook’s growth plans of building billion-dollar businesses around its messaging networks.
Their recently announced stock split would lead to even more growth.
Even though Facebook’s shares were up over 50% in 2017, plenty of investors are still wary about investing in the company because it’s seen as expensive. However, Facebook’s recent announcement of a stock split could help alleviate these concerns among investors. The stock split, which shareholders approved in June 2018, will reduce the number of outstanding shares. This will make each share worth more money, which can help spur on another round of investments.
According to Jonathan Weber in an article published on seekingalpha.com, “the stock split was motivated by the company’s desire to allow the company’s founder Mark Zuckerberg to give away a significant portion of his wealth to charity while maintaining control of the company.”
They have a solid balance sheet for any investor.
Looking at their financials, they finished 2017 with $47.7 billion in cash and other liquid assets while only having $13.1 billion in long-term debt. This shows that their money is well-managed, as it can be used to continue investing in new projects and growing their company. In addition, with this amount of cash, Facebook will have the ability to continue realizing growth and buying out smaller competitors with ease.
This solid balance sheet makes Facebook an excellent investment for any investor with a speculative mind. These types of companies are typically more expensive. Still, they also benefit from accumulating shares at a relatively high rate over time, which can help put money into your pocket sooner than other investments.
Final words
Facebook is one of the best investment opportunities. With the many changes they are making to better their product and continue to increase their revenues, investors are sure to continue making money off this website.
For those looking for growth in their portfolio, Facebook stock can provide plenty of potential yields.
