Facebook says: don’t just “Like” it, “Buy” it

What Will You Buy on Facebooks New Store?

This is undoubtedly among the most interesting and exciting news investors have heard from the world’s biggest social network (Facebook, of course) in quite a while. The social giant, world renowned for its “Like” and “Share” buttons, is about to issue a new and highly lucrative one, a “Buy” button!

That’s right, the company is accelerating its efforts to make Facebook not only an arena of social interaction but a vibrant online retail store with more than 1.2 billion active users.

Put your money where your “Like” is

Whether you like them, hate them or simply ignore them, those targeted advertisements on the side of your Facebook feed, and the sponsored posts within your feed are now going to have more than just a “Like” button next to them. With the new “Buy” button, users will soon have the ability to buy the showcased item right on their Facebook page, rather than being redirected to the retailer’s website.

The “Buy” button opens up more earning opportunities for Facebook, not just through advertising revenues but also by taking market share away from Amazon and eBay. Furthermore, the “Buy” button goes a long way to answering the digital age old question, does Facebook’s online ads translate into in-store purchases? The “Buy” button effectively adds a measurable return on an advertiser’s investment.

A recent study of twenty Facebook advertisers found a 2% rise in retail sales on average among Facebook users who saw an ad versus those who hadn’t. Doesn’t seem like much, but that 2% rise means an average 800% return on advertising dollars, with some retailers seeing as much as a 16-fold return of their advertising investment. With some $11.2 billion spent by retailers on digital advertising this year alone, the implementation of the “Buy” button, especially in the few months before Christmas, could amount to a great deal of holiday cheer for retailers and of course, Facebook itself.

Investors who “Like” (and Buy) Facebook

As the news of Facebook’s new “Buy” feature is echoing on Wall Street, the buildup and excitement over new frontiers for the social media giant may translate to a strong boost for the stock’s return. Yet when innovation fails to deliver it equally tends to create a brutal sell-off. This is why traders that closely follow Facebook may have a competitive edge as they know when the company is in the sweet spot and when things just are not what investors had hoped for.

On the flipside, traders who have experience with a stock may also know how to shrug off negative news and jump into the stock just as everyone else is getting cold feet, to catch the opportunity early. Two very interesting traders did just that; Iride Rosignoli and Kaz Hall have both proven themselves savvy investors by investing in Facebook just when the stock was losing fans, to be rewarded with gains of 28.42% and 79.34% (!) respectively.

Whether or not you believe the “Buy” option on Facebook means you should buy the stock is for you to decide, but if you are looking for traders that know how to time the stock well, these two up and comers might be worth checking out, among numerous other Facebook investors on our network.

Article Written By: Abby Tsype