Why investors aren't interested in Facebook's stock

Why investors aren't interested in Facebook's stock

The stock is trading at 22 times earnings, down from 28 in September when Meta shares were at a record high

Bargain hunters are no longer pouncing on skids in the shares of Facebook parent Meta Platforms Inc. the way they once did. 

The social media giant posted its worst week since June 2020 as investors fled riskier assets following a hawkish tilt by the Federal Reserve. Meta’s decline of 7.9% over the five sessions far outpaced those of mega-cap technology peers, but it wasn’t met with the surge of buying from retail investors that are helped lift the stock out of previous selloffs.

Also Read | Facebook sold ads comparing Covid-19, vaccines to Nazi Germany, Holocaust: Report

Net purchases of Meta by retail buyers barely budged this week, hovering around $40 million, according to data from Vanda Research. Five weeks ago, a similar drop in the stock price prompted a weekly inflow of more than $150 million and triggered a rebound in the shares.

Now, the cheapest of the mega-cap stocks keeps getting cheaper. Meta is less expensive than about 40% of the stocks in the Russell 1000 Value Index, based on price to trailing profits, according to data compiled by Bloomberg. 

The stock is trading at 22 times earnings, down from 28 in September when Meta shares were at a record high. Of course, that was before a whistleblower released a trove of internal data that fueled another round of intense scrutiny and more angst about regulatory risks.

Bargain hunters are no longer pouncing on skids in the shares of Facebook parent Meta Platforms Inc. the way they once did. 

The social media giant posted its worst week since June 2020 as investors fled riskier assets following a hawkish tilt by the Federal Reserve. Meta’s decline of 7.9% over the five sessions far outpaced those of mega-cap technology peers, but it wasn’t met with the surge of buying from retail investors that are helped lift the stock out of previous selloffs.

Net purchases of Meta by retail buyers barely budged this week, hovering around $40 million, according to data from Vanda Research. Five weeks ago, a similar drop in the stock price prompted a weekly inflow of more than $150 million and triggered a rebound in the shares.

Also Read | Meta to expand Facebook Protect program to India

Now, the cheapest of the mega-cap stocks keeps getting cheaper. Meta is less expensive than about 40% of the stocks in the Russell 1000 Value Index, based on price to trailing profits, according to data compiled by Bloomberg. 

The stock is trading at 22 times earnings, down from 28 in September when Meta shares were at a record high. Of course, that was before a whistleblower released a trove of internal data that fueled another round of intense scrutiny and more angst about regulatory risks.

Watch the latest DH Videos here: