Founded in 2004 by Harvard students Mark Zuckerberg and Eduardo Severin, Facebook (now Meta Platforms Inc) was founded as a way for undergraduate students to connect with each other. Two years later, it became available to everyone and, since then, the world has never been the same.
The college dorm room project has transformed into the social media behemoth now known as Meta Platforms, Inc. 15 years after its inception, Facebook is the go-to place where your mom posts embarrassing photos of your childhood years, your high school friends share questionable theories, and your ex posts mysteriously vague updates. But today, I’m not here to discuss how to unfriend or mute awkward acquaintances. Instead, I would like to focus on something much more practical: what you should do if you want a piece of Zuckerberg’s empire.
Since its IPO in 2012, Facebook has seen it all: meteoric rises, dramatic falls, and a rebranding that turned it into Meta in 2021, which showed its clear intention of going all-in in the development of the Metaverse. As elusive as it may sound, with nearly half the planet logging in monthly across its suite of apps—Facebook, Instagram, WhatsApp, and lately, Threads—Meta might just be right about it. If you too believe that the future will be a 24/7 Zoom call (but worse), you might be interested in buying Facebook shares.
Quick Guide – How To Buy Facebook Shares In the UK
Buying Facebook (Meta) shares in the UK is a straightforward process. Here’s how you can do it in five simple steps:
Download and Sign Up: Start by choosing a reputable online broker that offers access to US stocks. Sign up for an account using your email address and create a secure password.
Verify Your Identity: Complete the necessary identity verification by uploading a valid ID and proof of address. This step is crucial for complying with regulatory requirements.
Fund Your Account: Deposit funds into your brokerage account. You can transfer money using a bank transfer, debit card, or other supported payment methods. Make sure to convert your funds to USD if needed, as Facebook shares are traded in US dollars.
Search for Meta Shares: Use the platform’s search function to find Meta Platforms (formerly Facebook) by typing in its ticker symbol, META. Select the stock from the search results.
Place Your Order: Decide the amount you want to invest and choose the type of order (market or limit). Confirm your purchase by clicking ‘Buy’. You now own shares in Meta!
These steps will help you start investing in one of the world’s leading tech companies. Happy investing!
Please note that the information provided here is for general informational purposes only. All information on the site is provided in good faith; however, I make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. This content is not intended to be a substitute for professional financial advice. Always seek the advice of a qualified financial advisor with any questions you may have regarding investment decisions.
How to Buy Facebook Shares in the UK? Detailed Guide
Investing in Meta in the UK involves thorough research that we’ll cover below in the article. Investing in any company should be taken seriously as it carries risks and can result in permanent loss of funds.
Here is how you can start investing in Meta with the help of an investing platform.
Signup on an Investing Platform or use an Investing App
There are multiple investing apps, investing platforms, as well as robo advisors and micro investing apps available in the UK. Many platforms are designed for long-term investors who are looking to DCA and strategically grow their portfolio. Look for platforms that offer commission-free trading and tools for long-term investment strategies.
Complete the W-8BEN Form
Completing the W-8BEN form is a crucial step for non-U.S. residents who earn income from U.S. sources, allowing them to claim tax treaty benefits, including reduced rates of withholding tax. This form serves as a declaration of one’s foreign status and eligibility for these benefits, ensuring compliance with U.S. tax laws while potentially lowering the tax burden on U.S.-sourced income.
Top-Up Your Account
To buy shares in Meta, you will first need to fund your account with the amount of money you would like to invest. Navigate to your account settings and look for the deposit or funding option. From there, you can specify the amount you would like to add to your account.
Choose The Meta Stock
Once you have funded your account, you can search for Meta stock. Type Meta in the search bar and select Meta Platforms. If you want to buy only Meta shares, you should select only Meta. However, you can also include more stocks to diversify your portfolio and minimize your risk.
Buy Meta Stock
After selecting Meta stock, enter the number of shares you want to purchase and execute your order.
Construct your portfolio
Constructing your portfolio involves selecting a mix of investments that align with your long-term goals and risk tolerance. This step is about diversification, balancing between ETFs, stocks, bonds, real estate, and other assets to minimize risk while aiming for a desired return. Regular rebalancing ensures your portfolio stays on track.
Set Up a Recurring Monthly Investment
Setting up a recurring monthly investment is a powerful strategy to grow your wealth over time. It involves automatically investing a fixed amount of money into your portfolio every month, regardless of market conditions. This approach, known as dollar-cost averaging, can reduce the impact of volatility and help build investment discipline.
Monitor Your Meta Investment
Monitoring your investments is a critical aspect of managing your portfolio. It involves regularly reviewing your investment performance and making adjustments as needed to align with your financial goals and market conditions. This may include rebalancing your portfolio, reinvesting dividends, or changing your investment strategy based on life changes.
Calculate and Pay Your Taxes
Doing your taxes is a vital annual task for UK investors, involving the accurate reporting of income and capital gains from investments to HM Revenue and Customs (HMRC). It’s essential to be aware of your tax allowances, such as the Capital Gains Tax allowance and the Dividend Allowance, to optimize tax efficiency. Utilizing tax-advantaged accounts like ISAs and pensions can significantly reduce your tax liability, maximizing the growth of your investments. Staying informed about tax changes and seeking professional advice if necessary can ensure compliance and optimize your financial strategy.
How much would it cost to buy Facebook Shares?
Many platforms offer commission-free trading, so you won’t incur brokerage fees when purchasing shares. However, there might be other minor fees or currency conversion costs if you are funding your account in a currency other than USD. Look for cost-effective platforms that minimize extra charges that can eat into your investment returns.
Building An Investment Thesis: Is Meta A Good Stock To Buy?
But why invest in Meta? The Facebook platform seems to be losing a good chunk of its younger audience to social media like TikTok, while the company as a whole has faced a very rough patch of years between 2018-2022 after a series of hearings regarding the handling of user data, the use of the site by criminals and the Cambridge Analytica scandal.
At the same time, however, Meta remains a tech company at its core. Despite the hardships, the company’s revenue from advertising is staggering. It’s also making bold moves in AI and VR with projects like the Meta Quest 3 and Llama 2, positioning itself as a leader in the next wave of tech evolution. However, even in the innovation department, there are challenges. The Reality Labs division has been a financial sinkhole, and the volatile nature of tech stocks can make even the most stoic investor break a sweat. Still investing in Big Tech companies such as Meta, Nvidia or Google might have a lot of scope.
Meta Stock Fundamental Analysis
Fundamental analysis is the methodical research of measuring a stock’s intrinsic value to discover whether it is over- or undervalued. Here’s an in-depth guide on how to conduct a fundamental analysis of Meta Platforms, Inc. (formerly Facebook).
| Category | Metrics | Details | Industry Comparison |
|---|---|---|---|
| Profitability | Return on Assets (ROA) | 20.53% | Outperforms 97.01% of industry peers |
| Return on Equity (ROE) | 30.60% | Outperforms 95.52% of industry peers | |
| Return on Invested Capital (ROIC) | 24.19% | Outperforms 95.52% of industry peers | |
| Profit Margin | 32.06% | Outperforms 95.52% of industry peers | |
| Operating Margin | 38.70% | Outperforms 100% of industry peers | |
| Health | Altman-Z Score | 11.93 | Better than 92.54% of industry peers |
| Debt to FCF Ratio | 0.37 | Better than 79.10% of industry peers | |
| Debt/Equity Ratio | 0.12 | Outperformed by 62.69% of industry peers | |
| Current Ratio | 2.68 | Comparable to industry | |
| Quick Ratio | 2.68 | Comparable to industry | |
| ROIC/WACC | 2.61 | N/A | |
| Growth | EPS Growth (1Y) | 116% | N/A |
| EPS Growth (3Y) | 15.03% | N/A | |
| Revenue Growth (1Y) | 21.62% | N/A | |
| Revenue Growth (5Y) | 19.29% annually | N/A | |
| Projected EPS Growth (Next 3Y) | 21.93% annually | N/A | |
| Valuation | Price/Earnings (P/E) Ratio | 26.93 | 71.64% of companies are more expensive |
| Forward P/E Ratio | 19.85 | Cheaper than 68.66% of industry peers | |
| PEG Ratio (Next Year) | 0.73 | Indicates cheap valuation relative to growth | |
| Dividend | Dividend Yield | 0.42% | Higher than 88.06% of industry peers but lower than S&P 500 average |
| Dividend Growth | N/A | Less than 3 years of track record | |
| Dividend Sustainability | N/A | Strong free cash flow supports dividends |
Sources:
- Simply Wall St
- ChartMill
- MarketScreener
Here’s an easy-to-understand explanation of the basic metrics used in fundamental analysis of Meta Platforms, Inc. (META):
Profitability Metrics
Return on Assets (ROA): ROA measures how efficiently a company uses its assets to generate profit. A higher ROA means the company is good at converting its investments into net income.
Return on Equity (ROE): ROE measures the profitability relative to shareholders’ equity. It shows how well the company uses investments to generate earnings growth.
Return on Invested Capital (ROIC): ROIC measures how well a company generates returns from its capital. High ROIC indicates efficient use of funds to generate returns.
Profit Margin: Profit margin is the percentage of revenue that turns into profit after all expenses. It indicates how much profit a company makes for each dollar of sales.
Health Metrics
Altman-Z Score: A formula to predict the likelihood of a company going bankrupt. A high score indicates financial stability and low risk of bankruptcy.
Debt to Free Cash Flow (FCF) Ratio: It measures a company’s ability to pay off its debt with its free cash flow. A lower ratio means the company can quickly pay off its debts.
Debt to Equity Ratio: Indicates the proportion of equity and debt the company uses to finance its assets. Lower ratios indicate less risk as the company is less reliant on debt.
Current Ratio: Measures a company’s ability to pay short-term obligations with its short-term assets. A ratio above 1 indicates good short-term financial health.
Growth Metrics
Earnings Per Share (EPS) Growth: Measures earnings per share growth over time. Indicates the company’s profitability trend and growth potential.
Revenue Growth: A company’s sales increase over a specific period. Higher revenue growth indicates a company is expanding.
Valuation Metrics
Price/Earnings (P/E) Ratio: Compares a company’s current share price to its per-share earnings. Helps determine if a stock is over or under-valued compared to others.
Price/Free Cash Flow (P/FCF) Ratio: Compares a company’s market price to its free cash flow. A lower ratio suggests the stock is undervalued.
Dividend Metrics
Dividend Yield: Shows how much a company pays out in dividends each year relative to its stock price. Indicates the income generated from owning the stock.
These metrics provide a comprehensive overview of Meta’s financial health, profitability, growth potential, and valuation, making assessing the company’s investment potential easier.
Please note that the information provided here is for general informational purposes only. All information on the site is provided in good faith; however, I make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. This content is not intended to be a substitute for professional financial advice. Always seek the advice of a qualified financial advisor with any questions you may have regarding investment decisions.
Facebook’s Business Model
Facebook, now known as Meta Platforms, Inc., operates a multifaceted business model primarily driven by advertising revenue. Other revenue streams include virtual reality products, e-commerce, and digital payments. Let’s take a closer look at how the business works.
Revenue Streams
Advertising: The cornerstone of Meta’s revenue model is digital advertising, which accounts for approximately 97% to 99% of its revenue. Meta leverages its extensive user data to offer highly targeted ads, allowing advertisers to reach specific demographics based on age, gender, location, interests, and behaviours. This targeted approach enhances the effectiveness of ad campaigns, providing a high return on investment for advertisers.
Reality Labs: This division encompasses Meta’s ventures into augmented and virtual reality. Products like the Meta Quest VR devices generate revenue by selling hardware, software, and content. Although this segment is smaller than advertising, it represents Meta’s willingness to invest in emerging technologies.
Marketplace and E-commerce: Meta’s Marketplace allows users to buy and sell products. The company charges fees for certain transactions, expanding its revenue base beyond traditional advertising. This segment includes digital payments and transaction fees from services like Meta Pay in the US.
Data Licensing: While Meta does not sell user data, it uses it to enhance its advertising services, making ads more relevant and personalised. This indirectly monetises the data. So, while they do not sell the data per se, they do offer targeted advertisements to businesses based on your data. Make of that what you will.
Facebook’s Value Proposition: A Deeper Analysis
The company’s value proposition is centred around three core pillars: connectivity, engagement, and targeted advertising. It provides users a platform to interact with friends and family, share content, and access information. For businesses and advertisers, it offers advanced tools for targeted advertising, enabling them to reach a highly engaged audience in a cost-effective manner.
For Users
Social Connection: At its core, Facebook’s value proposition for users is the ability to connect with friends and family. The platform allows users to stay in touch, share experiences, and communicate through text, images, videos, and direct messages.
Content Sharing and Discovery: Facebook offers a highly sophisticated platform for users to share their content and discover new content from others. This includes updates, photos, videos, and articles. The platform’s algorithm curates content that is likely to be of interest to the user, enhancing the overall experience by providing relevant and engaging material.
For Businesses and Advertisers
Highly Targeted Advertising: One of Facebook’s most irresistible value propositions for businesses and advertisers is its ability to offer highly targeted advertising. With over 2 billion users sharing details about their everyday lives, the platform leverages the extensive data it collects on users’ demographics, interests, behaviours, and social connections, Facebook allows advertisers to reach their specific target audience with precision. This level of targeting increases the effectiveness and ROI of advertising campaigns.
Self-Serve Advertising Tools: Facebook provides user-friendly, self-serve advertising tools that make it easy for business owners to create and manage their own ad campaigns. These tools include various ad formats such as photos, carousels, videos, and stories, allowing advertisers to engage users in multiple ways. The platform also offers detailed analytics to track campaign performance and optimise strategies in real-time.
Facebook (Meta) SWOT Analysis
| Strengths | Weaknesses |
|---|---|
| Large user base with over 2.8 billion monthly active users. | Privacy concerns and past scandals like Cambridge Analytica. |
| Diverse product portfolio including Instagram, Threads, WhatsApp, and Meta Quest. | Heavy dependence on advertising revenue. |
| Advanced ad targeting capabilities. | Challenges in controlling platform misuse, such as misinformation and hate speech. |
| Strong brand recognition globally. | Increasing regulatory scrutiny and potential legal challenges. |
| Innovative culture focused on continuous development. | Platform fatigue among users. |
| Opportunities | Threats |
|---|---|
| Expansion into e-commerce with Facebook Shops. | Intense competition from other social media platforms like TikTok and Snapchat. |
| Growth in virtual and augmented reality markets through Oculus. | Impact of ad-blocking technology on revenue. |
| Expanding video content and original programming. | Regulatory pressures and potential fines. |
| Penetration into emerging markets such as India and Africa. | Changing user behaviour and preferences. |
| Forming strategic partnerships and alliances. | Cybersecurity threats and data breaches. |
Meta Q1 2024 Earnings: Growth Quarter over Quarter
Despite surpassing earnings expectations, the company issued a cautious outlook and raised the lower limit of its projected full-year expenses.
| Metric | Q1 2024 | Analyst Estimates | Q1 2023 | Year-Over-Year Change |
|---|---|---|---|---|
| Revenue | $36.46 billion | $36.27 billion | $28.65 billion | 27% |
| Diluted Earnings Per Share | $4.71 | $4.34 | $2.20 | 114% |
| Net Income | $12.37 billion | $11.35 billion | $5.71 billion | 117% |
In Q1 2024, Meta reported revenue of $36.46 billion, a 27% increase from the previous year, exceeding analyst expectations. Net income and diluted earnings per share (EPS) also surpassed estimates, doubling from the same period last year. For Q2 2024, Meta anticipates revenue between $36.5 billion and $39 billion, while analysts are expecting closer to $38.39 billion.
Investors are closely monitoring Meta’s advertising revenue growth, as it constitutes the bulk of the company’s income. The company has been enhancing its AI tools to improve ad targeting, recently unveiling an AI assistant for WhatsApp, Instagram, and Facebook that could compete with OpenAI’s ChatGPT.
Earlier this month, Meta also introduced its custom AI-capable chip. Other tech giants like Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN) have also developed proprietary chips to reduce dependency on Nvidia for AI hardware.
Buy Or Sell: Why You Shouldn’t Buy Meta Shares
The social media giant has not been exempt from problems and controversies. Issues of serious concern had been building for years over Facebook’s (now Meta’s) handling of user privacy and fake news, the company’s implicit role in permitting the site’s use by criminals and terrorists, and a massive user data breach.
In terms of performance, even though the stock has recovered from its 2022 dip, there are still some things to keep in mind that might make you want to give it more thought.
Overreliance On Advertising Revenue
Meta’s over-reliance on advertising revenue is risky. Since this is the main source of profitability, it makes the company vulnerable to fluctuations in the advertising market. Changes in privacy regulations and policies, like those from Apple that limit ad tracking, have already had a noticeable impact on Meta’s revenue streams. The landscape of digital privacy is ever-changing, and potential new regulations could further constrain Meta’s ability to target ads effectively.
VR Is Still Not Profitable
Mark Zuckerberg’s ambitious foray into the metaverse raises concerns. Despite heavy investments in augmented and virtual reality, these ventures have yet to prove profitable. The metaverse is still pretty much a speculative market with absolutely no guarantee of substantial user adoption or profitability. This uncertainty is further increased by the huge costs of developing and maintaining such technologies. While the company has proved that it can be forward-thinking, there is a good chance VR will flop eventually, costing Meta billions of dollars.
Regulatory Issues
Meta has been repeatedly cited for risk oversight failures by its shareholders, who are concerned about the company’s governance structure. The dual-class share system gives CEO Mark Zuckerberg outsized control, making it difficult for shareholders to influence company decisions. This governance issue is further exacerbated by allegations of prioritising profit over user safety and data privacy.
So, Is Meta Stock A Buy?
The answer to this question is complicated, and many factors must be considered. Even though there are concerns about the company, an investment in Meta can seem lucrative for some investors.
Meta has demonstrated an impressive rebound from a challenging 2022 fiscal year. The company’s stock has surged more than 30% in 2024, and its market cap surpassed the trillion-dollar mark earlier this year. A solid financial performance supports this resurgence. First-quarter earnings of $4.71 per share on sales of $36.46 billion, exceeded analyst expectations. Furthermore, the company’s impressive revenue and earnings growth reflects a strong recovery and effective business strategies.
Meta’s ambitious push into artificial intelligence can prove crucial to its growth strategy. CEO Mark Zuckerberg’s is committed (some might say, a bit too committed) to increasing investment in AI and the Metaverse, particularly through developing the Meta.ai chatbot and the Llama large language model.
However, there are risks to consider. The sharp stock selloff following the first-quarter earnings report highlights investor concerns about Meta’s increased capital expenditures and projected costs. The company’s guidance for higher 2024 expenses and capital expenditures suggests a prolonged investment phase, which might weigh on short-term profitability. Perhaps more importantly, regulatory challenges also loom large: ongoing investigations by the European Union and antitrust lawsuits in the U.S, could impact Meta’s operations and financial performance in the future.
Despite these concerns, analysts remain optimistic about Meta’s future. Most rate Meta as a buy, citing strong advertising revenue growth and the company’s ability to navigate its investment cycles effectively. The anticipated growth in revenue and earnings for 2024 further supports this positive outlook.
Please note that the information provided here is for general informational purposes only. All information on the site is provided in good faith; however, I make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information on the site. This content is not intended to be a substitute for professional financial advice. Always seek the advice of a qualified financial advisor with any questions you may have regarding investment decisions.
Frequently Asked Questions
Does Meta Pay Dividends?
In February 2024, Meta announced its first-ever quarterly dividend of $0.50 per share, which equates to an annual dividend of $2.00 per share. The dividend yield is approximately 0.43%, based on recent stock prices. In plain terms, if you bought 10 shares of Meta Platforms in February 2024, your total annual dividend would be $20.00.
How To Buy Meta (Facebook) Stock in the UK?
To buy Meta (Facebook) stock in the UK, choose a broker that offers US stocks, such as IG, Hargreaves Lansdown, or other reputable platforms. Open an account, verify your identity, and deposit funds. Search for Meta (ticker: META), decide on the number of shares, and place your order.
Is It Safe to Invest In Facebook?
Meta Platforms has a solid base and multiple growth drivers, making it a potentially strong investment. Still, investors should be aware of the associated risks and consider their own risk tolerance and investment strategy.
Should I Buy Shares In Meta?
Deciding to buy shares in Meta Platforms depends solely on your investment goals and risk tolerance. Meta has shown strong financial performance with strong revenue and earnings growth. The company’s dominance in the social media and advertising space, along with its investments in AI and new technologies, offer promising long-term growth prospects. However, there are risks associated with the company, which has shown signs of volatility in the near past.
Can You Buy One Share Of Meta?
Yes, you can buy one share of Meta. Many investing platforms allow you to purchase as little as one share, making it accessible for individual investors to start small and gradually build their portfolio.
Is Meta A Cheap Stock?
Whether Meta is considered a cheap stock depends on its current valuation metrics and comparison to its historical performance and industry peers. While the actual share price might be high, its valuation should be assessed based on factors like price-to-earnings (P/E) ratio, growth prospects, and market conditions.
Who Is Meta’s Biggest Shareholder?
Meta’s biggest shareholder is Mark Zuckerberg, the company’s co-founder and CEO. He holds a significant portion of the company’s shares, giving him substantial voting power and control over the company.
Does Warren Buffet Own Meta?
Warren Buffett, through his investment firm Berkshire Hathaway, does not own shares in Meta. His investment strategy typically focuses on companies with long-term value and strong fundamentals, but he has not shown a preference for investing in Meta Platforms.
