Facebook (FB) Stock Hits Record High: Is $500 per share by 2020 possible?

Facebook (FB) Stock Hits Record High: Is $500 per share by 2020 possible?
By: Dr. John E. Ware, I
Image Source: Wikimedia Commons

Many investors bought shares of Facebook (FB) when the company began trading on the Nasdaq on May 18, 2012. On the day of the initial public offering FB stock traded between $38 to $45 per share with trading volume over 580 million. The stock soon began to decline shortly after the initial public offering. Facebook hit a new low of $26.83 per share on May 31, 2012.  Three months later, September 4, 2012, shares fell to a record low of $17.55 per share. While many investors took this as a sign to sell, exiting their position, and realizing a loss; the savvy investor recognized the opportunity to acquire a position in the social media giant.

Today, Facebook (FB) stock climbed to a record high of $163.73 per share. Early investors that still own stock in Facebook have good reason to smile at their portfolios. A measly $1,000 invested at Facebook's record low is currently valued at approximately $9,300 and $10,000 investment is valued at approximately $93,000 today, further representing roughly an 830% return in five years, not bad...right? Suppose FB was bought at $40 per share: the current value of a $1,000 investment is about $4,000 and $10,000 investment is valued around $40,000, indicating a 300% gain.

Many factors can cause turbulence in the stock markets and day to day fluctuations in stock prices. However, the company's fundamentals, not emotions should guide decisions to buy and sell stock. Facebook fundamentals are sound and the company's performance speaks volumes: Read Can Facebook (FB) Generate $100 Billion by 2020?


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