Meta’s Record-Breaking Tumble Attracts Retail Dip Buying

Meta’s Record-Breaking Tumble Attracts Retail Dip Buying
Andrew Rummer

about 2 years ago1 min

Mentioned in story

Meta, the parent company of Facebook, plunged 26% on Thursday, wiping $251 billion off its market value in the biggest single-stock crash in history. But amid the frantic selling, prompted by Facebook’s first-ever decline in users, data from VandaTrack suggests that smaller investors were very happy to buy the proverbial dip.

As the chart above shows, retail investors purchased a net $231 million worth of Meta stock on Thursday, the most since July 2018. The volume of buying was about 25 times more than average since the coronavirus pandemic struck two years ago.

Retail investors clearly smell an opportunity in Meta’s dramatic dip, even if Wall Street disagrees. Following Wednesday’s results, it’s very hard to find an analyst with a kind word to say about the social media giant.

JPMorgan, which has had a buy rating on Meta since its 2012 market debut, downgraded the stock to hold on Thursday, saying it's “seeing a significant slowdown in advertising growth while embarking on an expensive, uncertain, multiyear transition to the metaverse.” Raymond James, BMO, and Loop Capital also cut their ratings.

Whoever is correct in the long term, Meta doesn’t appear to be due for an immediate bounce back from its bad day: the stock was little changed as of 7:30am in New York pre-market trading. 

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