2022/02/24 (009) Technical Analysis – META

It`s still time for the Meta Platform share – former facebook…
Meta Platforms recently lost 230 billion in market capitalization in one day
– almost as much as Germans Volkswagen & Siemens are worth together!


Tech stocks are suddenly no longer the darlings of the stock market. In the first few weeks of the year there was a veritable sell-off. There are a number of reasons – and offers opportunities. Netflix, Paypal & Meta, these brands were the stars of the stock market. Companies have repeatedly topped their own price and earnings forecasts in recent years. While other industries struggled with losses in the corona pandemic, many tech giants seemed to emerge from the crisis as winners. However, that ended at the beginning of the year. The former sure-fire successes have fallen deeply, with some shares falling by more than 20 percent. Looking at Netflix, Paypal and or Meta I can only write: “These were three absolute investor favorites in the recent past who really had to suffer a massacre at the start of this year 2022!”FAANG – the most powerful technology companies on the stock market today
Amazon is at the top: the company has added a further 578 billion dollars in enterprise value since February 2020. Digitization was yesterday, today is totally digital and that is why we take an analytical look twice a day at the most important players in the digital world, namely the so-called FAANG group: Facebook, Apple, Amazon, Netflix and Google. SAP is the only German company that is relevant with software on the international market and that is why we also report on the SAP share here. And two other values should not be missing: veteran Microsoft and the digital automotive tech group Tesla.

The FAANG shares in detail

Facebook’s price is now $205.94 per share. Compared to the February 2020 price, this is a decrease of 1.71 percent. The difference to the all-time high on September 1, 2021 is 45.98 percent. It is unclear whether the significant costs of combating fake news will have an impact on performance.Smartphones and laptops have rarely been used as much as in 2020: to work from home and to keep in touch with friends and relatives. Apple shares are currently worth $162.54. When compared to the all-time high of Jan. 4, 2022, that’s a change of minus 10.93 percent and compared to the February 2020 price, up 103.99 percent.

Hardly any company has been as profitable in the past 12 months as the online retailer Amazon. Jeff Bezos company shares currently sell for $2,996.21, down from $1,870.68 in February 2020 and hitting an all-time high on July 13, 2021 at $3,773.08 (currently down 19.77 percent ).

Netflix’s current price is 380.49 per share, up 9.42 percent from its pre-February 2020 peak. From February 2020, the paper was then at $ 347.74 (today: plus 9.42 percent).

The use of the search services from Google (parent company: Alphabet) and the video subsidiary YouTube increased significantly in 2020. On the other hand, some advertising revenues collapsed. The previous highest share value from before February 2020 is currently exceeded by 81.29 percent, currently it is $ 2,639.24 / share. Before the start of the global crisis in Feb20, the highest share price on 2020/01/22 was $415.44.Let`s focus on Meta Platforms,
because after the shares crashes,
the meta stock lures with a cheap valuation

Investors were shocked that Meta, the recently renamed parent company of Facebook, Instagram and Whatsapp, missed earnings expectations in the fourth quarter. Even more serious was the decline in daily active users, for the first time in the company’s history. In addition, the data protection options that Apple now grants its users do not bode well for the business with personalized ads.

The receipt was a massacer: the meta share price collapsed by around a third, and over $250 billion in market value fizzled out. The question now is whether the stock is cheap at current levels and whether long-term tech investors should buy. Apple, Alphabet or Amazon are valued significantly higher, Meta is now worth just half of its tech peers.

On paper, the group seems as cheap as it did when it went public around ten years ago. As the leading US financial newspaper “Barron’s” emphasizes, there was only a phase in 2018 when the price-earnings ratio was similarly low. At the time, it was a buying opportunity that brought bold investors a gain of more than 50 percent within 12 months.

48 billion in the till

In principle, metas problems seem solvable. The cash reserves alone in the amount of 48 billion dollars give the management a lot of leeway. In addition, there is still no way around Facebook, Instagram and Co in the advertising industry. An aggressive share buyback program should also support the price.

Nevertheless, the purchase recommendation is not clear. The idea of the Metaverse hasn’t really caught on with many investors. Instead, the necessary developments cost a lot of money – 3.3 billion dollars in the fourth quarter alone. In addition, it cannot be denied that due to its dominant position in the market, Meta is no longer the focus of regulatory authorities in Europe but also in the USA. In addition, the change of favorites on the stock exchanges away from growth companies could lead to further price losses.

As I expressly wrote it last week:
„thge stock is more than highly speculative!“

Although it means “never grab a falling knife”, I would like to argue against this principle as Iusually take to heart. But the emotional sentiment is so bad about this stock, that it could at least imminent temporarly something like a short technical reaction – even like in todays trading session?

However, the share is technically badly damaged!
And the fact that the company is swimming in money now seems to leave the market cold! Maybe the story is finally just sucked out? And Meta Platforms can do what they wanna do – it will never be the same again?