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Meta Platforms (FB) Stock News and Forecast: How low can Facebook go?

  • Meta Platforms stock cratered 26% on February 3.
  • FB shares have continued to edge lower and cannot find support thus far.
  • Facebook lost daily average users during Q4 for the first time in its history.

Meta Platforms (FB), the owner of Facebook and Instagram, continued to trade lower on Tuesday. Longtime board member and early investor Peter Thiel decided to leave the board, and analysts continue to criticize the social media behemoth's latest earnings call that showed user growth stumble. Shares are trading down slightly to $219.45 in Wednesday's premarket. The stock briefly dropped below $600 billion in market cap on Tuesday.

Meta Platforms Stock News: no good news

Peter Thiel's decision to leave Meta's board the week after FB stock lost more market cap in one day than any stock in history will be symbolic to many investors. It was Thiel, a cofounder of PayPal and Palantir, who famously invested $500,000 in Facebook for about 10% of the startup back in 2004. That stake turned into more than $1 billion by the time of the IPO in 2012.

Thiel was also instrumental in guiding founder Mark Zuckerberg as a new public company CEO. After a Q4 earnings release that saw the social media juggernaut lose daily active users for the first time in its history and a corresponding $230-plus billion one-day hit to market cap, the loss of Thiel will be interpreted as another slight against Zuckerberg's turn away from Meta Platforms' core advertising business and toward its hazy metaverse future. Spending more than $3 billion on metaverse investments in the previous quarter was another cause of investors running for the exits this past week.

Though most observers seem to think it is only brinksmanship, Meta has said it could pull some of its products, including Facebook and Instagram, from Europe if it does not win a court ruling concerning data sharing. An Irish data protection watchdog has warned Meta's management that its sharing of European user data with its US servers may be illegal. Europe comprised about one quarter of Meta's revenues in 2021.

"If a new transatlantic data transfer framework is not adopted and we are unable to continue to rely on [...] other alternative means of data transfers from Europe to the United States, we will likely be unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe," the company said in its annual report.

Analysts are not seeing a light at the end of the tunnel. Wedbush's Dan Ives said this week that getting back to a growth path will be quite the struggle. Seasoned analyst Mark Mahaney of Evercore ISI was more blunt: "Shares are probably dead money at this level of growth for at least the next three months."

FB key statistics

Market Cap$612 billion
Price/Earnings16
Price/Sales5
Price/Book5
Enterprise Value$579 billion
Operating Margin40%
Profit Margin

33%

52-week high$384.33
52-week low$216.16
Short Interest1%
Average Wall Street Rating and Price TargetBuy, $353.91

Meta Platforms Forecast: eyeing $200

Once near $400 just weeks ago, the consensus price target on FB shares is now near $350. That is still way above where they currently sit – $220. At this point, investors and traders are just wondering where the bottom is.

From the weekly chart vantage, one support zone sits between $207 and $212. This zone saw both resistance and support between May and July of 2020, nearly two years ago. Below here, the $200 level provides both historical and psychological support. The historical support stems from January and May of 2020. Could FB stock fall below $200? Definitely it could since anything is possible in this market, but FXStreet finds $200 the more reliable stop. If it does, however, $173 adds more support.

If Mahaney is right, then Facebook might be dead until the next earnings release. The only thing that would make us bullish is if FB closes above $245. This price acted as support in August and September of 2020 and then again in January 2021. It is the main target of any short-term bulls.

FB 1-week chart

Author

Clay Webster

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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