Are you wondering how to buy Instagram stock? Instagram is one of the most popular social networks in the world. It is a photo and video sharing social network owned by Facebook.
While you may already be thinking of investing in Instagram stock, this article does not advise you to invest in Instagram stock. We will share how you can buy stock in companies, with Instagram as an example.
Investing in Instagram stock is an investment decision for which you might want to consult your investment advisor. This is not investment advice by any means.
Instagram is a highly visual platform, and it allows users to upload images and videos. Celebrities, brands, and businesses use it to promote themselves and build relationships with their fans and customers.
It is available on several platforms, including iOS and Android. Using this app, users can browse other users’ content and like and follow others. It allows users to share posts or share posts with pre-approved followers publicly. Instagram is used by more than 1 billion people worldwide to share their lives with friends and family, and it is the most popular photo-sharing app.
Instagram’s strength is its user engagement, which directly translates into revenue. Instagram influences purchase decisions of 80% of its users and contributes over $20 billion to Facebook’s annual revenue.
Instagram users spend close to an hour on the app on average each day, and over 70% of the billion monthly active users are under 35. If you want to invest in Instagram stock, you’ll need to buy shares in its parent company, Facebook.
The story of Instagram
Instagram is free to use and was initially developed by Kevin Systrom and Mike Krieger. Systrom graduated from Stanford University and was working at Nextstop, a travel recommendations startup. He had worked in Google earlier as a corporate development associate.
Although Systrom had no formal training in coding, he learned to code on the weekends and built a web app called Burbn, which allowed users to share photos, post their plans and check in.
At a party, Systrom met two venture capitalists from Baseline Ventures and Andreessen Horowitz who were interested in his app. He raised $500,000 in seed funding from them and decided to quit his job and focus on Burbn.
This funding allowed him to build a team and the first person to join was Mike Krieger, who was a Stanford graduate and had worked as an engineer at the social media platform Meebo.
After Krieger joined, they decided to focus only on photographs taken on mobile devices and stripped Burbn down to the photo, commenting and liking functions. They renamed the app Instagram, a combination of the words instant and telegram.
The idea was to have a minimalist app, that would have just a few actions from the user. They launched the app for beta test after eight weeks of fine-tuning and Instagram was launched after resolving the errors from the beta test.
On the day of the launch, Instagram quickly gained 25,000 users in one day. Within the first week, it had been downloaded 100,000 times and within two months the number of users reached one million.
The timing of the launch of Instagram was after launch of the iPhone 4 which had an improved camera. This was great for Instagram.
Investor interest in the company grew after the rapid rise in the user base. In 2011, Instagram raised a $7 million Series A funding.
Benchmark Capital, one of their investors valued the company at $25 million. In spite of the funding, Instagram remained small, with just a dozen employees.
Twitter and Facebook, leading social media technology companies were also interested in Instagram. Twitter was particularly interested and made an acquisition offer of $500 million in stock, but Systrom declined.
In 2012, Instagram was acquired by Facebook for 1 billion U.S. dollars. At the time of the acquisition, it was a shocking figure for a startup with just 13 employees.
Facebook, Inc. is an American multinational company founded in 2004 by Mark Zuckerberg and has its headquarters in Menlo Park, California, in the United States.
Facebook’s products include Facebook, which allows people to connect with friends and family through mobile devices and personal computers; Instagram, which is a community for sharing photos, videos and private messages; Messenger, which is a messaging application for people to connect with friends, family, groups, and businesses across platforms and devices; and Instagram, which is a messaging application that people and companies use to communicate privately; Facebook Reality Labs, an augmented and virtual reality product that helps people feel connected, anytime, and anywhere.
Investing in Instagram stock
If you’re thinking of investing in Instagram stock, you should invest in Facebook shares. You should look at the Facebook’s recent performance and future growth potential. You should also look at future product announcements and other impacts on the markets Facebook operates to analyze if any information could impact Facebook’s stock adversely.
Instagram stock price
Since Instagram is not separate from Facebook, it is not listed independently on the stock exchange, and it’s not possible to estimate the Instagram stock price.
Instagram stock symbol
We don’t have an Instagram stock ticker because Instagram is not listed on the stock exchange, but Facebook is listed on the NASDAQ with the ticker symbol FB.
Facebook’s recent stock performance
Facebook stock has been performing well in the last five years. In April 2016, Facebook’s stock was trading at $110.63, and the current price as of April 2021 is $294.53. Although there was a dip in Facebook’s stock price because of the pandemic, the Facebook stock has rebounded quickly in a few months.
Buying, selling and trading Instagram stock
Here are the differences between buying, selling, and trading Instagram stock.
Buying Instagram stock: Buying Instagram stock involves finding a broker and placing an order to buy Instagram stock buy buying Facebook stock. You would want to buy at a lower price to profit if the stock price goes up.
Selling Instagram stock: If you already hold Facebook stock, you can sell it for a profit if you’d like to. If the Facebook price has increased significantly since you purchased it and if the market conditions look favorable for selling, that is, if you expect the Facebook stock price to drop, you can sell the Facebook shares and make a profit. Selling Facebook stock involves finding a broker and placing an order to sell Facebook shares.
Trading Instagram stock: Trading Instagram stock is the same as buying and selling Facebook stock, but it is done over shorter periods. With trading, the goal is to make smaller profits quickly. You also run the risk of making losses rapidly as well. If you’re a new investor, we recommend buying and holding your investment in Facebook for a more extended period, i.e., six months to a year or more.
What to consider before you invest in Instagram stock
To make sure that you don’t lose money investing, you need to do your due diligence before you invest in Instagram stock. Here are the steps to follow.
1. Understand how the stock market works
If you want to invest in Instagram stock via Facebook stock, you should understand how the stock market works. You should not panic when stocks go down or buy in a frenzy when stocks trade high.
2. Research Facebook stock
As an investor, it is a good idea to buy stocks in companies that you’re already familiar with and know well. If you are already using Facebook’s products and trust the Facebook brand, you can buy Facebook’s shares. Before you buy Instagram stock by buying Facebook shares, you should take steps to research the stock and its fundamentals.
You should look at where Facebook gets its revenue from, how its growth looks like, and what its plans are. Most of this information will be available in Facebooks’s annual report in the annual letter to shareholders.
This letter will share the essential updates in the business. Facebook’s SEC filings, Facebook conference call transcripts, Facebook’s quarterly earnings updates, and recent news about Facebook are good sources of information to analyze the company.
The more analysis you do and the more information you have, you will make more intelligent decisions about investing in Facebook’s stock.
3. Examine broader market conditions
You should also look at broader market conditions before you buy Facebook stock. If it is a bull market, the price will go up, and it would make sense to buy the stock immediately. If it is a bear market, the price will go down, and it might be better to wait to buy at a lower price.
How to buy Instagram stock?
Buying shares online is a simple process, even for new investors. If you’re thinking of buying Instagram stock by buying Facebook stock, you must decide whether you want to buy the stock for the short term or the long term. If you’re going to invest in the short term, you should perform a technical analysis of the stock.
If you want to hold Facebook stock for the longer term, you should perform a fundamental analysis of Facebook. You should also keep yourself updated with news and with developments of Facebook. Here are the steps you need to follow.
1. Select a broker
To buy Facebook stock online, you will need to use an online brokerage platform. Our broker reviews can help you select from the best brokers for trading Facebook stock. In general, you should look at the following parameters before selecting a stockbroker.
Stocks available for trading: The first criteria for selecting the broker is that you should be able to use the broker to trade Facebook stock.
Commissions charged: Some brokers charge a higher commission, so if you want to maximize your profits, you would want to choose a broker with lower commissions.
Account fees: You should also watch out for other fees such as annual fees, inactivity fees, trading platform subscription fees, and fees for research or data. Brokers will also charge a fee for transferring cash or investments or for closing your account. You can avoid many of the fees by choosing a broker that doesn’t charge fees or by opting out of services that cost extra.
Payment methods: Some brokers are more flexible in their payment methods than others. If you want flexibility in payments, this should be one of your criteria.
Track record: You should choose a broker based on their track record. The broker that you choose should have a track record of reliability, and they should have been around for a while and have good reviews online.
Our broker reviews can help you select from the best brokers for stock trading. Here are the best stock brokers of 2021.
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2. Open a brokerage account
This is the account in which your shares will be stored. Opening a brokerage account has become very simple. The steps vary from platform to platform, but you should be good to create your account once you provide your details and some form of identification. Again, the time taken to open an account varies between platforms.
3. Fund your brokerage account
The next step is to log in to your account and deposit money in your brokerage account. Most brokers accept bank and debit card transfers, and some accept transfers through other methods such as PayPal.
4. Decide how many Facebook shares to buy
If you’re a new investor, you could start small with a small amount and gradually increase your investment as you get more experienced in the stock market. You can also think about investing in fractional shares, which certain brokers offer. Buying a fractional share means you are purchasing a portion of Facebook stock instead of the whole stock. If the Facebook share is too pricey, you can opt to buy a fractional share in Facebook.
5. Choose your stock order type
All you have to do now is search for the FB ticker, specify the number of Facebook shares, choose your order type and click on buy. Once you place your order for Facebook shares, your broker will execute the order, and the Facebook shares will be listed in your account.
There are different order types you can place. Let’s look at the most commonly used ones, the market order and the limit order.
The market order instructs your broker to place an order at the prevailing market price for Facebook. There are no price parameter restrictions on this order. You should use this order type for stocks that don’t experience wide price swings, generally larger company stocks. Stock prices can vary between seconds.
If a small price fluctuation does not matter to you, you should place a market order. If you place a market order trade “after hours”, when the markets have closed for the day, your trade will get executed the next day at the prevailing market price.
The limit order instructs your broker to place an order when the Facebook stock reaches a specific price point. It gives you control over the price at which your trade is executed.
For example, if the Facebook stock is trading at $200, but you value Facebook at $180, the limit order tells your broker to wait till the Facebook stock price reaches $180. Limit orders are suitable for smaller company stocks that experience wide price swings.
6. Review your position in Facebook
Once you have purchased Facebook stock, you should monitor the Facebook stock periodically according to your investment strategy. You should follow Facebook’s quarterly and annual results and the news and developments in Facebook.
Investing always comes with certain risks and Facebook is no different. You can reduce risks by diversifying your portfolio and by avoiding scams by choosing a reliable broker.
To recap, you can invest in Facebook stock and indirectly invest in Instagram stock by selecting a broker, opening a brokerage account, depositing money in your brokerage account, placing an order, and reviewing your position periodically.