At the beginning of last year, Facebook saw a very large drop in its stock price. This is likely due to Facebook's growth slowing down.
Case for buying:
As of January 24, 2023, its P/E/ ratio is now 12.98 which is remarkably low for a tech company. The saying is that one should be greedy when others are fearful. It appears that investors are currently fearful.
Facebook is the first company to go into virtual reality in a big way. This could be huge for the company and earn it much more revenue in the future.
Despite faltering domestically, Facebook is still growing worldwide.
Case for selling or holding off:
Facebook is facing strong competition from the likes of TikTok
First mover advantage has very little precedent in the tech industry in which market growth is so high and technological change is so quick that it's easy for rivals to do something better. None of the big tech companies were first movers. Google replaced Yahoo which started out competing with other search engines. Amazon replaced Book Stacks Unlimited (tbf, Amazon was kind of a first mover for overall online retail). Apple replaced Osborne in the PC market before getting overtaken by Microsoft (Apple eventually bounced back with iphones and macs). Facebook itself replaced MySpace. What I'm trying to say is that Facebook's virtual reality is likely to face some serious competition from probably one of the other big tech companies. There is already talk of Apple developing its own virtual reality.
Personal thoughts:
I think with everything said, Facebook would be a good buy in the short or medium term but not the long term (investors should pay careful attention to the development of virtual reality by potential rivals). Investors may eventually come to the conclusion that they overshot their fear. Netflix went down 68% in 2022 but has since then doubled. As of January 24, 2023, it's still going up.
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