How to Buy Facebook (Meta) Shares in the UK

Facebook, or Meta Platforms Inc (NASDAQ:META), shares had a fairly rough time in 2022. With the company switching strategies to focus on building a metaverse, the level of internal spending has some investors on edge, sending the stock price firmly in the wrong direction. Yet, others are excited about the firm’s plan to build a digital reality and its potential growth opportunity.

Despite the name, Meta still generates the bulk of its income through digital advertising revenue on its social media platforms. And with consumer spending down, courtesy of economic uncertainty, marketing budgets for businesses have largely been cut back.

Pairing reduced revenue with increased spending isn’t exactly the ideal combination for strong earnings. But this could be a result of temporary short-term headwinds. And providing CEO Mark Zuckerberg and his team is successful in their mission to build the metaverse, the depressed valuation could be a buying opportunity.

With that said, let’s explore how British investors can buy shares in Meta Platforms and discuss whether it’s actually a good idea.

Can you buy Facebook shares in the UK?

Despite being in the UK, British investors can access the US stock market. However, to do so requires a broker that supports international trading with UK exchanges. Specifically, investors need a trading account that will let them buy and sell stock on the Nasdaq exchange, where Facebook is listed.

Additional tax forms must be completed when venturing beyond the London Stock Exchange. When buying and selling UK stocks or other types of securities, most international investors will need to fill out a W-8BEN form and submit it to their broker.

By default, a foreign individual investing in US stocks is subject to a 30% tax on any income, such as dividends. However, since the UK and the US have a tax treaty, completing this form will slash the tax rate by half to 15%. 

For individuals uncomfortable with filling out tax paperwork, it may be prudent to contact a financial adviser to handle everything. Alternatively, British investors could buy shares in a UK-traded mutual fund or exchange-traded fund with Meta Platforms within its portfolio. 

The latter option is an indirect method of investing in the company without needing to complete additional tax forms. However, it also means owning a collection of other stocks an may not be interested in.

How to buy Facebook shares in the UK 

Let’s go through the five main steps of adding Facebook shares to an investment portfolio.

1. Open and fund a brokerage account

The first step on any investment journey is opening an appropriate brokerage account. This will allow individuals to deposit their money and use it to buy and sell shares in publicly traded companies.

The list of brokers to choose from is fairly long, each offering similar or differentiated services with pros and cons. It’s up to the investor to investigate and select the best trading platform for their personal circumstances.

When it comes to being able to buy US stocks like Facebook, a trading platform needs to allow the buying and selling of individual stocks (not just funds), as well as grant access to the US stock market.

It’s also essential to check how a platform handles currency conversions. Given that Facebook is listed in the US, its share price is quoted in US dollars. And most brokerages will charge a currency conversion fee that will impact trading costs.

Another special type of brokerage account British investors should consider is the Stocks and Shares ISA. ISAs often carry higher account and commission fees than other popular online trading platforms. However, they provide immunity to all capital gains tax and dividend income taxes from investments. And in the long run, this can have a profound positive impact on the wealth-building process.

2. Build an investment thesis

With a suitable brokerage account open and funded, the next step is to build a detailed investment thesis about Facebook. This collection of notes contains justified an investor’s reasons to buy the stock and the risks surrounding an investment. It can also make it easier to decide when to sell in the future should the original thesis stop panning out.

Historically, Facebook shares have been one of the highest-performing tech stocks on the stock market. However, past performance never guarantees future returns, especially when the company is in the process of drastically changing its business model. As such, investors need to spend time researching the group before making an investment decision.

That means understanding the business, analysing the financial statements, background checking the management team, finding the weaknesses, identifying the opportunities, and deriving an appropriate valuation. This helps make a more informed investment decision and helps to determine when to sell in the future.

Needless to say, it’s a lengthy process. But it is one that can help an investor avoid traps and lead to far superior returns in the long run. After all, if investors don’t understand where they’re investing their hard-earned cash, they will likely end up destroying their wealth rather than creating it.

This is where a service like The Motley Fool Share Advisor can help significantly accelerate the research process.

3. Decide the appropriate allocation

With a firm understanding of Meta’s business model and risks, the time has come to decide how much to invest in the company. And there is no real right or wrong answer here.

Capital allocation depends on individual circumstances such as personal risk tolerance and portfolio diversification. A conservative investor may choose to allocate only a small portion of their capital to the business, whereas a growth investor with a high risk tolerance might be comfortable investing considerably more.

4. Buy Facebook shares

With a capital allocation decision made, it’s time to buy Facebook shares. After signing into their trading platform and going to the share dealing page, all an investor has to do is type in the company name or ticker symbol, enter the amount they want to invest, and then hit the buy button to receive a quote.

But remember, since Meta is a US business listed on the Nasdaq exchange, trading can only occur while the US stock market is open. In local time that’s between 9.30am and 4pm. For British investors, that means 2.30pm to 9pm from Monday to Friday.

5. Review and adjust

Buying Facebook shares is not the end of the process. Investors need to keep an eye on how the company is progressing in relation to their original investment thesis. 

Suppose the business is failing to hit certain targets and milestones. In that case, it could be signs of trouble brewing, indicating a potential selling point. Alternatively, if management consistently exceeds analyst expectations, investors may want to consider topping up their portfolio position.

Where to buy Facebook shares in the UK

As previously mentioned, UK investors looking to buy shares in Facebook need to have a trading account that grants access to the US stock market, specifically the Nasdaq stock exchange.

Trading platforms will provide a complete list of features, fees, and supported exchanges on their website. And Investors need to spend time comparing the available options to find the brokerage account that’s most suitable for their personal circumstances. That includes exploring the option of using a Stocks and Shares ISA for the tax benefits.

Is it worth it to buy one share of Facebook?

Despite popular belief, the number of shares owned by an individual investor is essentially meaningless. That’s because every business has a different number of shares outstanding and why stock prices can’t be directly compared to each other.

What matters is how much money has been invested into a stock. Today Facebook shares are trading at a stock price of around $152. 

For investors with a small amount of capital, that could be a considerable investment relative to other positions in their portfolio. Some investors may have to using trading platforms that support fractional shares in order to make a smaller investment. But for others, buying a single share may not even represent 1% of their holdings.

So, is it worth buying a single share of Meta? The answer ultimately falls back on the investment thesis. Suppose the company meets an investor’s personal requirements without breaching their risk tolerance, and a single share is all they can afford. In that case, even a small investment may still be worthwhile.

Should UK investors buy shares in Facebook?

With all that said and done, should UK investors buy Facebook shares? Venturing into international markets is a proven strategy for finding new investing opportunities. However, it comes with additional risks, such as different accounting standards and fluctuating exchange rates.

Therefore, investing in a US stock ultimately depends on personal risk tolerance and investment strategy. Growth stocks like Meta Platforms can be exceptionally volatile, which could keep conservative investors from getting a good night’s sleep. On the other hand, it may also open the door to tremendous returns in the long run. Time will tell.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.