Buy Facebook shares - how to invest in Facebook shares in South Africa

How to buy Facebook shares

Facebook is the largest social networking company. Mark Zuckerberg, along with Eduardo Saverin, Chris Hughes and Dustin Moskowitz, founded it in 2004. At first, Facebook was available only to students at Harvard University. But it quickly became available to a wider range of users. It was opened to the world audience in September 2006. To register, you had to have an email address and be over 16 years old.

Today, the ecosystem of this public company consists of Facebook, Instagram, Messenger, WhatsApp applications. The main profits come from advertising, accounting for over 90% of the firm's total revenue, with 50% coming from the US and Canada and 25% from Europe. With gross margins above 80%, Facebook is operating at a net margin of nearly 40%.

Facebook attracted huge investments that reached billions of dollars. Founders, contributors and stakeholders are interested in keeping this machine running and bringing profits. It all makes Facebook shares very popular.

In May 2012, Facebook went public on the NASDAQ stock exchange and the ticker FB was assigned to the company's shares. Issuer FB was able to place shares at 38 USD per share, while the company's market cap rose to 104 billion dollars. Good publicity has enabled the company to conduct a successful IPO.

FB shares have climbed to $ 304.67 in these years and reached their historical maximum in August 2020.

Information about Facebook shares on the stock exchange
Information about Facebook shares on the stock exchange

How to invest in Facebook shares

If you are a beginner, then you better take the advice of an intermediary, namely, a licensed broker or investment company. Then you need to conclude a standard service agreement with them, after which they will open a special securities account, which makes it possible to buy and sell securities on the exchange, as long as the shares of the companies you want to buy are admitted to circulation. Next, you need to provide brokers with documents, sign an application for the purchase of shares and transfer money. After that, the broker will carry out transactions regarding the purchase / sale of shares on your request.

If you do not have enough funds to buy shares, you can choose CFD trading.

These are contracts for the difference in prices, where the underlying asset is securities. In practice, this type of trading is almost no different from working with real stocks, with a few exceptions:

  • The trader does not become an owner of the asset;
  • No dividends are provided when purchasing CFDs;
  • The process of transactions takes place only between the broker and the trader.

As a result, traders get the opportunity to work with stocks on more simplified and affordable terms:

  • You can start trading with a small deposit and huge leverage;
  • There are no restrictions on short positions;
  • Instant opening and closing of transactions;

As a rule, you do not need to install a trading terminal - all trading takes place in a browser or mobile application.

CFDs on shares are a convenient tool that allows a trader to profit from changes in the price of shares of Facebook shares. An important advantage of such contracts is that the trader does not receive ownership of the shares. Therefore, he does not need to meet the requirements of a qualified investor and have a large deposit.

Investing in Facebook shares
Investing in Facebook shares

Facebook shares Investment Platform

Facebook shares are available for purchase on the Nasdaq marketplace, the US stock exchange that lists high-tech companies. Individuals cannot buy shares directly. So they need a broker that will act as an intermediary between a trader and the stock market.

Besides performing trading operations and providing trading instruments, brokers offer the following services:

  • economic news feed;
  • a calendar of important economic events;
  • fresh forecasts from leading analysts;
  • useful information for novice traders;
  • free indicators and advisors.

 With a properly selected broker, you will achieve a variable income.

How to start investing in Facebook shares

The whole process is not as difficult as you may think. To have access to a trading platform, every trader needs to go through a registration procedure and activate a brokerage account.

How to register

In most cases, it is enough to state the name and email to get registered on the broker platform. But you should take into account that no money withdrawals are possible without an identification procedure. You need to be ready to submit your personal details and copies of documents proving this information.

Registration on the broker platform
Registration on the broker platform

How to open a demo account

Most brokers offer free training accounts to their clients. It is recommended not to neglect demo trading. Even if funds allow you to spend a significant amount on gaining experience and testing various strategies, there are a number of nuances that will help you minimize losses.

A demo account allows studying the trading terminal, making a real order, correcting minor technical mistakes when testing trading ideas. And it all is absolutely risk-free.

How to open a real account

Normally, it is usually a few steps between a demo account and a trading account. If you feel you have enough skills to trade for real money, you need to activate an account for it. The main requirement is to replenish your account for the minimum sum specified by the broker.

How to open demo or real account
How to open demo or real account

How to fund a deposit

Reputable brokers are customer-oriented and provide multiple channels for money transfer. As a rule, everyone is free to choose between a traditional wire transfer, bank card and all types of e-wallets.

Deposit replenishment
Deposit replenishment

Minimum deposit amount

Every platform has different minimum deposit requirements. The brokers tend to make trading affordable for everyone and allow opening a trading account with $5-10.

How to withdraw money

If you have successfully completed the verification process, you simply send a request for money withdrawal. In most cases, you will receive the money within 3 working days.

Security of Facebook share Investments

Like everyone else, the popular social media giant occasionally faced difficulties, but it really struggled in 2018. Before that, there were several scandals due to violations of the privacy and security of user data, fake news, as well as inadequate management response to what is happening. As a result, the Facebook shares price fell sharply by more than 20%, which was the biggest drop in the entire history of the social network. In fact, it was the largest loss of market capitalization in the history of the US stock market - the corporation's value fell by more than $ 100 billion at once.

Despite the many challenges, the company's long-term perspectives remain positive.

How safe is it to invest in Facebook shares

The social network Facebook has become an integral part of the lives of millions of users around the world. It is not only a great platform for interaction, but also a place to conduct business, advertise, buy and sell.

Here are the main factors that will continue to support Facebook stocks:

  • An increase in the number of registered users.
  • The number of active participants (these are users who are often online and actively use the social network).
  • Acquisition of startups by the company or launch of its own. They can be connected with social networks, or belong to a different sphere like the Libra cryptocurrency project.
  • Release of new services for online projects. The company is planning to make it possible to directly sell goods through the social media network.
  • An increase in the number of advertisers and an increase in the price of Facebook ads.
  • Positive financial results.

Even experienced billionaires believe in the future of Facebook –Bill Gates owns the securities of this social network. The emergence of new services and innovative projects is increasing the popularity of Zuckerberg's company, leaving its competitors far behind.

Periods of temporary price declines on global market shocks shouldn't be scary. On the contrary, they give investors the opportunity of buying Facebook shares at the best price.

How to safely invest in Facebook shares online

Before buying shares of Facebook and any company, you should ensure that the company's business fundamentals are strong and shares have good growing potential. This approach includes various forms of analysis, the most important of which are fundamental and technical analysis.

Using the former one, the investor evaluates the intrinsic value of a stock, taking into account the general economic background and industry conditions, as well as the financial component of the company and the management policies of its management.

The latter analysis type of the securities market is a price forecasting system based on information obtained as a result of market trading. Instead of looking at the intrinsic value of a stock, the investor focuses on identifying patterns and trends in the current and future price movements of a stock.

Basically, investors should study the financial situation of the company.

My investments in Facebook shares are protected

To justify buying shares, an investor should analyze the company's ad revenue growth, profit trends, total revenue, and monthly active users. Do these numbers go up, down, or stay in place?

After careful study and decision to buy shares, the investor must determine if the current price is a good entry point. 

It is important to determine if a stock is undervalued (when the entry price is most attractive) or overvalued (investors can wait until the price drops before buying the stock). This ratio is the most common market valuation metric.

FAQ:

Can you buy Facebook shares?

Facebook shares are freely traded on the Nasdaq stock exchange. Anyone can buy them. To do this, you need to choose a trading platform, open an account with a brokerage company that gives you access to the exchange you need, install a special trading terminal. After it, you need to wait for a suitable price and make a purchase.

The company regularly launches a lot of new services and innovative projects, and the demand for its shares is constantly growing. So we assert that Facebook shares have huge potential.

You can buy shares through a broker with access to the NASDAQ stock exchange.

In December 2020, the price of a share reached $ 267.40 according to NASDAQ.

If you are a beginner, you can start with buying one-two shares to test how the financial market works.

It is currently not known if and when Facebook will pay dividend yield. So it is better to focus on making a profit from price changes: when the value of Facebook shares rises, purchases will be appropriate, and if the forecast suggests a possible weakening of the price, use the tactics of earning on the decline.

First National Bank announced in October 2020, that South Africans can own shares of big international companies, including Facebook. To realize it, individuals need to find an online broker with access to the FNB shares trading platform.

At the beginning of the year, the price of the company shares dropped due to the COVID-19 pandemic. But till the end of the year, the situation was leveled up. Facebook shares have performed admirably through the pandemic, and are now up 43% over the past year.

There are both internal and external factors that affect stock quotes. This year, global factors worked not in favor of many companies. The world collapse of stocks in 2020 was driven by the crisis due to the coronavirus pandemic. Investors sold stocks, and all stock markets crashed.

Facebook's share price strengthens as a result of strong quarterly reports from the company, news of new product and service launches. The increase in the number of active users and the profit generated from advertising will also support the share price in the future.

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