Zinger Key Points
- Meta., formerly Facebook, is the one of the best-performing S&P 500 stocks this year, having added over 100% year-to-date.
- Meta's return since IPO has outpaced the S&P 500 reflecting the market's optimism concerning its fundamentals.
- Discover Fast-Growing Stocks Every Month
It's been 11 years since Meta Platforms, Inc. META, which was earlier known as Facebook, made its public debut. The company and by extension, its stock has had a roller-coaster ride since then, although in the near past, both have found their mojo back.
Humble Beginnings: Facebook as a company had a modest beginning in a Harvard dorm room. Mark Zuckerberg, along with his collegemates, started a social website called "TheFacebook" in February 2004 to be used as a private network for college students.
An LLC company was registered two months later and the first official investment soon followed. Peter Thiel made a $500,001 angel investment in the company in June 2004 in return for a 10.2% stake in the company. He also joined the board of the company.
Facebook acquired the facebook.com domain name in August 2005 and also opted to drop "The" from the company name.
Product development proceeded at a robust clip thereafter. The company launched "News Feed" in 2006 and the mobile version of the app went live in January 2007. The company launched the Facebook Platform for developers in May 2007.
Controversies: The Facebook Beacon, which went live in November 2007, led to a class-action lawsuit against it on privacy concerns. Beacon, a targeted ad system, was accused of publishing user activities on external sites without permission. Beacon was shut down two years later.
The famous “Like” button was introduced in Feb. 2009. The company partnered with Skype to add video chat in June 2011 and launched Facebook Timeline in November of the same year.
In a major development, Facebook acquired the photo-sharing app Instagram in 2012 for $1 billion.
See Also: How To Buy Meta (Formerly Facebook) Stock
High Profile IPO: Facebook went public on May 18, 2012, by offering 421.23 million shares of its Class A shares at $38 per share. About 180 million shares were offered by the company and the remaining 241.23 million by selling shareholders.
The IPO price valued the company at $104 billion, the highest valuation for a newly-public company at that time.
The shares of the Menlo Park, California-based company opened its debut session at $42.05 and traded in a range of $38 to $45 before settling the session at $38.23.
Rocky Ride: Facebook's stock was rangebound for about two years amid worries about slowing revenue growth and massive insider selling. As fundamentals improved amid a strong pick-up in advertising revenue, the stock began to turn the corner in the middle of 2013.
More upside followed and the stock first breached the $100 level in Oct. 2015.
Facebook came under fire for privacy issues yet again in March 2017, when media reports claimed that it turned over 87 million Facebook profiles to the U.K,-based political consulting firm Cambridge Analytica.
Despite controversies, the stock surged to $384.33 in September 2021 but later plummeted to $88.09 in November 2022. Macroeconomic uncertainties and Zuckerberg’s extravagant spending on nascent metaverse tech weighed on ad revenue and investor sentiment.
Incidentally, Zuckerberg rebranded Facebook as Meta Platforms in October 2021 to emphasize its focus on the metaverse.
When the stock cratered in late-2022, the Facebook CEO ushered in a year of efficiency at the company, cutting jobs and reducing spending. The broader tech industry's resurgence has also worked in the stock's favor.
Chart Courtesy Of TradingView
Returns From Facebook. A $1,000 invested in Facebook at its IPO price of $38 would have fetched an investor 28.3 shares. The same shares would be worth about $6,863 at the stock's closing price of $242.49 on Wednesday. This represents a 486% return on the initial investment over an 11-year period.
In comparison, the S&P 500 Index would have fetched a return of 221% over the same period.
In premarket trading on Thursday, Meta stock rose 0.03% to $243.56, according to Benzinga Pro data.
Read Next: Meta Platforms AI Initiatives And Reels Progress Praised By Analysts After 2022 Saw ‘Hate Selling’ Of Stock, Now A ‘De-Risking Story’
Photo: Wikimedia Commons
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
