In recent years, social media has become an integral part of our lives. From staying connected with friends and family to promoting businesses, social media platforms offer numerous benefits. Instagram, a photo and video-sharing platform, has over one billion users worldwide.
If you’re interested in investing in Instagram, you can buy shares of its parent company, Meta Platforms (formerly known as Facebook). According to recent data, Instagram has an estimated net worth of $102 billion.
In this article, we’ll guide you through the process of investing in Instagram.
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How to Invest in Meta Platforms
While you can’t invest directly in Instagram, you can buy shares in Meta Platforms, the company that owns Instagram.
To invest in Meta Platforms, you’ll need to following these steps:
- Choose a Stock Trading Platform: Before investing in Instagram, you need to choose a stock trading platform. Many online brokerages allow you to invest in Meta shares.
- Open an Account: After selecting a stock trading platform, you need to open an account. You’ll be required to provide your personal information and sign up. Once you’ve opened an account, you need to verify your identity.
- Fund Your Account: After verifying your identity, you need to fund your account. You can deposit funds into your account by linking your banking information or transfer funds from another trading account.
- Search for the Stock Name: After funding your account, you need to search for the stock name. Meta Platforms is listed on the Nasdaq with stock code META. You can search for the stock by name or ticker symbol.
- Buy the Stock: Once you’ve found the stock, you can place your order. You can buy as many shares as you want. After buying the stock, you become a shareholder of Meta Platforms and indirectly invest in Instagram.
Understand Instagram’s Business Model
Instagram is a popular social media platform with over one billion users around the world, especially among younger generations. Users can share and create photo and video posts, connect with friends, follow accounts, and explore popular hashtags.
The platform makes its revenue through advertising and attracts a wide range of businesses, from small startups to large corporations. Instagram’s users are mostly active, with 60% logging in every day, and spend an average of 53 minutes scrolling through their feeds.
Instagram users are open to following businesses, with around 90% following at least one, and a majority of users (78%) enjoy seeing brands on the platform.
Brands can also leverage influencer marketing on Instagram, where regular individuals use a product and share it with their followers, with almost 90% of people finding Instagram to be vital for this type of marketing. Instagram influencers can earn millions of dollars per year through sponsored posts.
With its active user base, popularity among businesses, and support for influencer marketing, Instagram remains a powerful platform for social media marketing.
- Learn more about how Instagram makes money.
Risks of Investing in Instagram
If you’re thinking about investing in Instagram, it’s crucial to understand the potential risks involved.
The social media industry relies heavily on user engagement, meaning that if users aren’t regularly using the app, engaging with ads, or spending time on the platform, it can negatively impact the value of advertising on the app.
Even a small number of advertisers leaving could lead to a decrease in earnings for Instagram and a decline in its stock price.
It’s important to stay up to date with the latest news and trends related to the platform since negative news or user dissatisfaction can have a significant impact on the stock price of Instagram’s parent company, Meta.
For instance, last year, Meta lost nearly two-thirds of its value due to increasing costs associated with the metaverse and a struggling economy, as well as heightened competition from TikTok and Apple’s privacy update, which limited ad targeting.
Tips for Investing in Instagram
Investing in Meta, the parent company of Instagram, is a long-term investment. The company’s stock price has shown consistent growth over the past few years, and many analysts expect it to continue to perform well in the future.
Here are some tips for investing in Instagram:
- Do your research: Before investing in any stock, it’s important to do your due diligence. Read up on the company’s financials, management team, and overall strategy. Look for any news or reports that may impact the stock price.
- Consider your investment horizon: When considering investing in Instagram, it’s important to have a long-term perspective. It may take some time to see significant returns, especially given the current economic climate. The FED has pushed its benchmark rate to between 5% and 5.25%, which has had a negative impact on the value of many tech stocks, including Meta (formerly Facebook). If you decide to invest, you may need to wait until the FED hints at reducing interest rates before you see a consistent rise in the stock price of Meta.
- Diversify your portfolio: It’s important to have a well-diversified portfolio that includes a mix of different assets. Don’t put all your money into Instagram or any single stock. Instead, spread your investments across different industries and asset classes.
- Consider working with a financial advisor: If you’re new to investing or unsure about how to get started, consider working with a financial advisor. They can help you develop a personalized investment strategy that aligns with your financial goals and risk tolerance.
- Stay up-to-date on Instagram news: Instagram’s success is not guaranteed. Stay up-to-date on the latest news and trends related to the platform. This will help you make informed investment decisions and avoid any unexpected surprises.
The Bottom Line
Investing in Instagram may not be suitable for everyone. However, if you’re interested in social media and see its potential, it could be a smart long-term investment.
Recently, there’s talk of banning TikTok, Meta’s biggest competitor, and Mark Zuckerberg has shifted his focus away from the metaverse.
This could mean that Meta’s financial situation may improve. Nonetheless, it’s important to diversify your investment portfolio and keep up-to-date with the latest news and trends to make informed decisions that align with your financial goals and risk tolerance.