Everyone has been talking about stocks and investing nowadays. The renewed interest in investing is likely a result of modern brokers making it easier than ever to own stock. In the past, you would have to go to a physical exchange and pay for expensive brokerage services. You may be interested in one company in particular: Instagram, and wondering “can you buy Instagram stock?”
Now, you can download an app, hook up your bank account, and trade shares from the biggest and most well-known brands. These include Amazon, Microsoft, and more.
Instagram is one of the most popular and widely-used social media websites. It currently boasts over 1 billion distinct users and grossed over $.84 billion in revenue in 2019. So naturally, people are wanting to get in on this lucrative business.
So technically, no you cannot buy Instagram shares. Back in 2012, Facebook bought Instagram for a tidy sum of $1 billion, which was a lot of money for a social media company back then. As such, Instagram is completely under the ownership of Facebook. That means that shares for Instagram specifically do not trade on the stock market. But, you can sort of buy into Instagram if you invest in Facebook shares. So if you own some shares in Facebook, then you already invest in Instagram!
The upshot of Facebook owning Instagram is that if you buy into Facebook, then you are also buying into several other well-known tech brands such as Messenger, WhatsApp, Oculus, and more. Facebook is always buying up smaller tech startups so FB shareholders always have some new line of tech innovation to improve their stock portfolios.
Can You Buy Instagram Stock? Does Instagram Have Stocks?
Strictly speaking, no, Instagram does not have stocks. Before the company was bought by Facebook in 2012, the company had standalone shares, but now the company is a 10% subsidiary of Facebook so those shares are no longer trading publicly. If you want to invest in Instagram and take advantage of its growth, then you need to invest in Facebook shares. Technically, you won’t be invested in Instagram, but it is essentially the same as Instagram’s performance will be reflected in the larger Facebook share price.
As a general rule of thumb, you cannot buy stocks in a company that another company fully owns. But you can still kind of invest in the owned company by buying shares in the parent company. So for example, if you want to invest in any company that is owned by Facebook or Google (which is a lot) then you have to buy shares in the parent company.
Buying Parent Stock
Buying parent stock has both advantages and disadvantages. For advantages, investing in a parent company usually gives you broader coverage over some sectors. For example, when you buy Facebook shares, not only are you getting a stake in Instagram but you are also getting a stake in the countless other subsidiaries that Facebook holds.
As far as disadvantages go, parent companies that own a lot of subsidiaries like Facebook tend to have high share prices. So while you are getting a lot of coverage in the market, you have to put down more money upfront to get your foot in the door. You also don’t really have a choice as to whether your investment money goes to fund other subsidiaries other than the one of interest to you.
So as you can see, buying Instagram stock would have some positives and negatives. You would get all that positive exposure from buying into the parent company and all its owned subsidiaries. But you will also have to deal with the higher share price. Also you will be investing in things that you might not be particularly of interest to you.
What Is the Stock Price of Instagram?
As of the time of writing, Facebook’s share price is $307.72 per share and has a total market cap of around $875 billion with about 2.4 billion total shares outstanding. Facebook has a daily average trading volume of around 20 million, meaning that nearly $5 billion worth of Facebook shares trade hands every day in the stock market. That is an extremely high trading activity which explains why Facebook is one of the most successful companies in human history.
Over the past 5 years, Facebook stock has grown more than 300% from sub-$100 share prices in 2016 to over $300 per share in 2021. So let’s do some math to see how profitable Facebook/Instagram stock is. Had you invested $10,000 in Facebook back during its original IPO in 2012 and bought $10,000 worth of shares, you would have gotten 263 shares. Assuming that you did not add any money to this account, then that $10,000 would have increased to over $81,000. An 800% growth rate is surprisingly not the best stock market returns around, but it is a very good ROI.
How to Buy Instagram Stock?
Buying Instagram stock is very easy. First, you need to open a brokerage account. This is easy as there are literally hundreds of investment apps you can download and use. Some popular online brokerages include Robinhood, WeBull, M1 Finance, and TD Ameritrade, among others.
Once you create an account, you have to connect a bank account and fund your brokerage account. Most online brokerages nowadays do not have an investment minimum or minimum deposit, though some might. Once you have your account funded, you can simply search for Facebook’s stock symbol (FB) and you can buy as many shares as you want.
Other Important Things to Know Before Buying Instagram Stock
Here are some quick facts to know before buying Instagram stock:
- Facebook is in hot water right now with many governments and other agencies. Many countries have been passing strict regulations surrounding the company’s activity and security practices. These restrictions could have effects on the share price going forwards.
- In general, Facebook trends are slowing down. The company is still the single largest platform online, but its membership rates have been falling in recent years and other social media companies are catching up.
- The current democratic administration may significantly raise taxes on large corporations. Tax law changes might affect Facebook share price going forwards.
- Is Instagram a good stock to buy?
- Considering that Facebook is one of the most well-known and profitable companies in the world, yes. In general, investing in Instagram through Facebook is generally good stock to buy due to the company’s historical performance.
- What is Instagram’s stock symbol?
- Instagrams stock ticker used to be IG but since the company was bought by Facebook, the relevant stock ticker is FB.
- Is Instagram a publicly-traded company?
- Technically not. Instagram is a fully owned subsidiary of Facebook and does not have its own shares on the market. However, the parent company Facebook is publicly traded and is in fact one of the largest publicly-traded companies in the entire world.
At the end of the day, investing in any large tech company can be a good way to round out your portfolio. Investing in Instagram is a good idea because its parent company is one of the most profitable in the entire world. So investing in Instagram through fAcebook shares is almost always a good idea.