Mixed stock market report for the social network. It shows the worst performance among FAANG. But remains an inevitable juggernaut on Wall Street.
, the parent company of the social network Facebook, is celebrating its 10th anniversary in the stock market. If it can claim to be one of the most important companies listed on Wall Street and in the world, with a market value of approximately $ 548 billionThe birthday cake is hard to swallow for many investors. Its performance since its IPO has been very weak compared to other technology giants: + 430% mod + 1,700% for Netflix+900% for Amazon+800% for Microsoft+680% for Apple and +640% for Alphabet (Google) during the same period.
The story of Meta / Facebook in the financial markets is actually closely linked to the hate-love relationship with investors. But it all starts with a resounding failure. On May 18, 2012, the company founded by Mark Zuckerberg took its first steps on the Nasdaq at a cost of $ 38 per. Its valuation reaches more than $ 100 billion and in fact then the largest IPO of a company active on the Internet. But not everything goes as planned. While the first offer is expected at. 17:00 (Belgian time), it will take more than thirty minutes to see a price shown.
“We had bad thoughts about the opening of the Facebook campaign,” the head of the Nasdaq admits a few days later as a mea culpa. Technical problems hampered the exchanges. Result: what was supposed to be a fanfare post ended in a semi-failure. The title closed its first session with an increase of 0.61%.
Descent to hell and golden period
A real crisis of confidence arises. The next day, the action plunges by 11%. And another 9% drop the next day … In less than four months, Facebook lost just over half of its market capitalization. Questions from investors its economic model. What’s more, many banks accusehas overestimated the company by dangling views more attractive than in reality.
Between 2012 and 2018, sales of mobile advertising are booming. And the Facebook action also at the same time.
It will take more than a year before the Meta / Facebook title regains the set price for its listing. Little by little, the California business is improving its image with investors thanks to results above expectations. Mobile ad sales are booming. And his action also at the same time. She wins more than 700% between mid-2013 and early 2018.
Then a new scandal broke out. The case Cambridge Analytica – the name of this UK company responsible for exploiting Facebook data for political purposes – has the effect of a bomb and spreads market confidence in small pieces like a jigsaw puzzle. The company loses one-sixth of its market capitalization in one week.
Investors fear a loss of users and, above all, a strong reaction from politicians. Many of them expect stricter rules in the US and Europe, which could weigh on sales of the technology giants.
The icing on the cake (poisoned), on the evening of July 25, 2018, reports Facebookweaker than expected revenue growth. And also indicates that its revenue will remain under pressure for the rest of the year. The next day is the storm on Wall Street. The title plunges by 19% in a single session and obliterates nearly $ 120 billion in terms of market value. Unheard of at the time. Its decline stops on Christmas Eve with -43% on the counter.
A safe haven that has become a “has been”
Once again, Mark Zuckerberg and the other leaders of the social network gradually manage to bring investors back thanks to record results. If the pandemic weighs on the stock market for a while, it is very quickly forgotten. Many people see FAANG as safe harbor during this period of uncertainty. Which lifts the Facebook stock to historic heights. Its market value thus reached $ 1,000 billion by the end of June 2021.
Meta / Facebook has still not recovered from its historic decline in early February. Faced with rising interest rates, investors decided to move on.
Meta / Facebook is still not restored. Faced with rising interest rates, investors decided to move on. However, analysts remain optimistic about the medium-term growth outlook.. More than half of them recommendbuy this stock that has become cheap.