FB investment in 2012 a good bet!

in #facebook6 years ago

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Even given the stock market's recent volatility, a $1,000 investment in Facebook six years ago would still prove to be a good bet: You could have quadrupled your money.

An initial investment in Facebook in 2012, when it made its initial public offering, would be worth slightly more than $4,600 as of Wednesday, according to CNBC calculations. The investment would have seen a lifetime total return of more than 360 percent, including price appreciation and dividend gains reinvested.
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The market's recent activity has taken a toll, of course: In one month, Facebook's stock dipped from $5,051. Its current portfolio value is just above 30 percent now, down from its peak of more than 40 percent. And the market keeps ebbing and flowing.

In the charts below, all data splits are adjusted and gain-loss figures do not include dividends, interest, distributions or fees except on cash accounts. The portfolio value represents current holdings and the comparison charts represent current and historical prices of individual benchmarks, stocks or exchange-traded funds.

Changes to Facebook's news feed as part of an initiative to crack down on the share of low-quality viral videos reduced the amount of time users spend on the network by 50 million hours a day in the fourth quarter, the company reports.

Meanwhile, daily users in the United States and Canada dropped in 2017 to 184 million daily average users in the fourth quarter from 185 million in the third quarter.

Facebook chief financial officer David Wehner, on the company's earnings call, said usage would "fluctuate" based on market penetration. The revenue increase despite the usage drop could be due to seasonal changes related to the advertising market.

As the company points out, users in the fourth quarter accounted for $6.39 billion of Facebook's revenue, compared to the $5.03 billion users accounted for in the third quarter.

Facebook has retreated slightly from its record price reached earlier this month as investors debate whether changes to the platform to combat fake news and other problems will hurt advertising growth. But the stock is still up 1 percent on the year.

And some investors remain bullish about the stock. "News feed changes do not impair the power of the platform," Andy Hargreaves, an analyst at KeyBanc Capital Markets, wrote in a note to clients.

"Facebook offers reach, targeting and ad-unit quality that is difficult to match, and they are the underlying drivers of its growth. As long as [it] continues to improve its effectiveness, the foundation for strong growth should remain intact, regardless of adjustments to the news feed."

If you're considering investing in the stock market, experts advise that you begin carefully. Any individual stock can over- or under-perform and past returns do not predict future results.

Experienced investors Warren Buffett, Mark Cuban and Tony Robbins all suggest starting with index funds, which hold every stock in an index, offer low turnover rates, attendant fees and tax bills, and fluctuate with the market to eliminate the risk of picking individual stocks.

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