Facebook and should you buy or sell its stocks

Category: Finance 11 0

The world is ruled by technology in the 21st century and mainly social media websites and platform places where billions of users interact with one another and share content and information. These sites also generate enormous amounts of revenues and they are fully fledged companies, so much so that the biggest one among all is Facebook, which has a market capitalization of just over 450 billion dollars, making it more powerful than some of the economies of the world. The value is actually a little lesser, after a poor Q2 showing from the company.

For any investor with a vested interest in Facebook earnings, now is a perilous time, where you are undecided on whether you should sell your stocks or buy more. The company, continues t grow despite being plagued with issues from all sorts of lawsuits and complaints. Despite a tremendous growth in usage of its applications, there is still a big doubt in the minds of investors and stock analysts on whether investing is a good idea or not. The company recently lost nearly 123 billion dollars in the last quarter due to a big commission hearing of the CEO regarding privacy issues.

This put a high level of distrust in the company and thus led to a huge downfall of the company stock prices. Now as we approach its earnings date, it is time we take look at what the calendar predicates and see what we should do about our interest in the company.

Facebook earnings calendar

The earnings date for Facebook is confirmed to be on 30th October, which is exactly three weeks away and thus puts you in the best possible spot to plan and strategize on what move you should make right now. There is a number called the PMAEA or the predicted moves after the earnings announcement, which is an expected percentage movement of the stock price in either direction. The number is what, everyone targets and works their strategies around, it also happens to be fairly accurate.

The PMAEA is calculated by analysts and brokers and people come to the conclusion about this number based on a series of factors about the company and its history. These include, but are not limited to, the history of the stock, the company fundamentals and core values, how it performed after previous price releases and much more. All of these factors are important when it comes to getting an accurate number, and this year the PMAEA is expected to be around 6%, which puts the strike price at 12%.

A strike price is a number, if the stock ever touches that number on earnings date, you can rest assured you should most definitely buy the stocks. The reason why the PMAEA is so valued is that on earnings date, there is usually a very large amount of company stocks that are moved around, nearly 6 to 7 times as much from a usual day. Investing in Facebook seems like a risky option as of now, but as we await the actual announcement there might even an earnings surprise!

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