Almost 50 percent have a share of Metaplatforms (formerly Facebook) lost since the beginning of the year. The stock is now valued at a price-earnings ratio of around 13 (source: Thomson Reuters, as of July 12, 2022). It makes the stock cheaper than ever before. Technically, a bottom is formed between $ 155 and $ 172. Is the trend reversal coming?
On July 27, 2022, Meta Platforms figures for the most recent quarter will be released. Investors are cautious. In the first quarter of the current financial year, sales increased by only seven percent compared to the same period last year. Profits fell by about a fifth. The group was cautious regarding the second quarter. There may even be a decrease in sales compared to the second quarter of 2021. Among other things, Meta Platforms will be pressured by the increasing competition from Tiktok and other platforms. In addition, Apple’s tracking opt-in limits apps’ tracking capabilities. This makes it harder for Meta Platforms to gather information about user interests and measure the success of ad campaigns.
Even. Now there is still pressure from Europe. For many years, there has been disagreement about the extent to which globally operating Internet companies are allowed to transfer data from European users to the United States. Significantly more restrictive data protection rules apply in EU countries than in the United States. The solution would be to leave the information exclusively in data centers located in EU countries and subject to European law. Companies like Meta Platforms have so far resisted that. A new draft executive order from the Irish Data Protection Commission is once again aimed at the internet giants’ cross-border data transfer practices. In Europe, Meta Platforms-owned Facebook and Instagram could be shut down in a short time due to repression by Irish data protection authorities. The beginning of the published draft decision of the Irish Data Protection Commission (DPC) shows that Meta platforms should be banned from transferring data from European users to the United States. Whether it will speed up an agreement between the United States and the European Union remains to be seen.
Meanwhile, Zuckerberg’s biggest project is the creation of Metaverse – a kind of digital parallel universe. It opened up brand new revenue streams for Meta platforms. Meta Platforms is currently testing its virtual reality platform Horizon Worlds. It offers creators and developers of virtual objects and experiences to sell them in the three-dimensional world. In addition, Meta Platforms is already one of the market leaders in VR glasses and intends to launch four more VR headsets by 2024. Recently, there has been speculation that Meta platforms may “Sandboxes“take over. The virtual worlds are still in their infancy. However, other technology companies such as Nvidia and Microsoft have long developed products for the virtual world.
In light of the recent fall in prices, a large part of the risks appear to have been priced in the share price. Nevertheless, another setback cannot be ruled out. Structured products such as a Protect reverse convertible or a bonus ceiling certificate could be an interesting alternative to investing directly in the stock.
Resistance Levels: $ 171.70 / $ 201
Support Level: $ 140.40 / 154.80
The Meta Platforms stock fell from $ 330 to $ 240 in early February this year and subsequently fell below the $ 200 mark. After a brief recovery in the second half of March, the downward trend continued. In the last four weeks, the newspaper has settled between USD 154.80 and USD 171.70. If the eruption above the upper limit of the corridor is successful, there is a chance of a recovery to the cross-resistance area of USD 201. Until then, however, further setbacks must be expected. If the stock falls below $ 154.80, there is even a threat of consolidation up to $ 140.40.
US dollar meta-platforms; Daily chart (1 candle = 1 day)
Observation period: 07/06/2021 – 07/12/2022. Historical observations are not reliable indicators of future developments Source: tradingdesk.onemarkets.de
US dollar meta-platforms; Weekly chart (1 candle = 1 week)
Observation period: 13/03/2012 – 07/12/2022. Historical observations are not reliable indicators of future developments Source: tradingdesk.onemarkets.de
Reverse convertible Protect (Quanto) on shares in Meta Platforms (formerly: Facebook) for speculation that the stock is moving sideways or moderately up
||interest||Final assessment day|
|Metaplatforms||HVB6W3*||100% **||75% ***||13.5% pa||26/07/2023|
* quanto; ** of the nominal *** x reference price on the first observation date; Source: HypoVereinsbank onemarkets; Status: 07/12/2022; 11:40
Bonus Cap Certificate on Meta Platforms (formerly: Facebook) shares for speculation that the stock is moving sideways or moderately up
|Underlying||WKN||Sales price in EUR||Barrier in US dollars
||Bonus level / ceiling in US dollars||Final assessment day|
* quanto; Source: HypoVereinsbank onemarkets; Status: 07/12/2022; 11:40
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The contribution Meta-platforms – bottom in sight! appeared first onemarkets blog (HypoVereinsbank – UniCredit Bank AG).
Author: Richard Pathenhauer, HypoVereinsbank onemarkets