Facebook: Millennial investors piling into shares after earnings plunge

A
father and son enjoy the atmosphere prior to Chaka Khan’s live
performance at Sydney Festival 2014.
Don Arnold/Getty Images

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Young investors are betting that
Facebook’s earnings disaster and
subsequent stock landslide are presenting a buying
opportunity to get the stock at an attractive valuation.

Data pulled from Robinhood — the free stock-trading app popular
with young adults — shows roughly 27,000 more users had snapped
up the stock Thursday morning compared to the same time a week
ago.

The spike in popularity also takes Facebook up to the fifth most
popular stock on the brokerage, its Top 100 page shows. The
social-media giant was as low as number 10, when Business Insider
first began tracking the data in June.

Shares of Facebook declined as much as 26% —
wiping out over $115 billion in market value — following the
social network’s earnings report that showed a shortfall on
revenue compared to what analysts had expected and a decline in
user metrics for the first time.

But while the slump may be a good buying opportunity, it didn’t
take Facebook into the red for the year. Wednesday’s drop has
shares trading at levels seen just before a data-privacy
scandal surrounding the firm Cambridge Analytica and its role in
Russian interference in the 2016 US presidential election
surfaced.

Analysis from the stock-trading forum StockTwits points to
investors being bullish ahead of the results.

Eighty percent of the discussions were bullish heading into
earnings, the firm said in an email to Business Insider, adding
that “investors seem unphased after seeing Facebook’s ability to
weather the Cambridge Analytica news.” Those investors are likely
having second thoughts on Thursday.

Facebook is now down 3.2% this year. 

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