After just reaching an all-time high of $195.32 per share on Feb. 1, 2018, the Facebook stock price is falling today because of the global sell-off sinking all indexes.
At today's (Feb. 6, 2018) opening price of $178.57, FB stock marked a loss of 8.57% in just five days.
However, investors shouldn't panic...
It's natural to just think our individual investments are the only ones losing money, but the entire Dow Jones Industrial Average lost nearly 4% on Feb. 5.
Everyone is feeling the heat as stocks slide.
But rather than panicking, this is a time to reflect on why you bought FB stock in the first place. Strong companies that make products people can't live without can weather the storms.
In fact, Money Morning Director of Technology & Venture Capital Research Michael A. Robinson projects the FB stock price will climb 40% in the next three years. A short pullback is worth it to book that kind of gain.
But before we get to Robinson's prediction, we had to make sure Money Morning readers know the three biggest reasons why the Facebook stock price falls.
You see, panic-selling is always the worst move to make.
No one ever made money buying at all-time highs and selling during price dips.
And by knowing the three reasons the FB stock price falls, you'll be psychologically prepared to handle downturns...
Why the Facebook Stock Price Is Falling Today, Reason No. 3: Global Sell-Off
Facebook is one of our favorite stocks, and the FB stock price has climbed over 370% since its 2012 IPO.
In comparison, the Dow Jones Industrial Average is up just 84.23% during that time.
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But the FB stock price is not immune to a stock market correction.
Just look at the correction in August 2015.
On Friday, Aug. 21, 2015, the Dow fell 531 points (3.12%) for the day. The FB stock price opened at $87.52 on Aug. 21, 2015, and then fell 11.98%, to $77.03, when the market opened back up on Monday, Aug. 24, 2015.
The FB stock price also fell during the 2018 stock market correction, where the FB stock price dropped 8.5% in just five days.
Keep in mind, though, the FB stock price was trading at all-time highs just a few days ago. The FB stock price has surged since these short-term sell-offs.
But sometimes the Facebook stock price can drop because of an industry-wide sell-off...
Why the Facebook Stock Price Is Falling Today, Reason No. 2: Tech Sells-Off
Stocks in the tech sector can have volatile price swings because Wall Street worries about bubbles.
For example, Pets.com was considered part of the "dot-com" bubble in the late 1990s and early 2000s. Investors wanted to grab a piece of any company involved with the Internet, fearing they were missing out on revolutionary technology.
Pets.com went public in February 2000, but it closed its doors just nine months later.
Now, tech companies obviously have better services and products today, ranging from social networks with billions of users to virtual reality headsets.
But the fear of a bubble can still rattle an entire industry.
For example, a tech downturn started on Dec. 4, 2017.
The FB stock price dropped 3.40%, from $176.29 on Dec. 4, 2017, to $170.45 on Dec. 5, 2017. The Amazon.com Inc. (Nasdaq: AMZN) stock price dropped 3.88% during that time, Microsoft Corp. (Nasdaq: MSFT) fell 3.64%, and Alphabet Inc. (Nasdaq: GOOGL) dropped 1.63%.
You get the idea.
When Wall Street starts worrying about the tech sector, all tech stock prices can drop.
Of course, it's not just a global sell-off or a correction in the tech sector that can send the FB stock price lower.
Reports can send investors into a panic, which pushes the Facebook stock price lower...
Why the Facebook Stock Price Is Falling Today, Reason No. 1: Bad Press
On Nov. 1, 2017, Facebook reported its Q3 2017 earnings results.
Even though Facebook increased revenue 47% year over year, to $10.3 billion in Q3 2017, the Facebook stock price still dropped 0.47% the next day.
Shareholders were worried after CFO David Wehner said 2018 operating expenses would climb 45% to 60% from 2017 totals.
In an even bigger downturn, the Facebook stock price dropped 2.8%, from $169.24 on Sept. 25, 2017, to $164.50 on Sept. 26, 2017. That's when The Washington Post suggested Facebook could be probed for Russian influence through ads ran during the 2016 U.S. elections.
To recap, the three biggest reasons the Facebook stock price is falling are global sell-offs, industry-wide sell-offs, and specific information about the company that worries shareholders.
But none of these short-term triggers make it a good idea to sell Facebook stock.
Remember, the FB stock price has climbed 370% since its 2012 IPO. Any drop in the FB stock price has been a short-lived pullback.
In fact, Robinson believes FB stock is worth keeping in your portfolio because even more double-digit returns are on the way...
The FB Stock Price Could Climb 40% by 2020
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By 2020, Robinson projects the FB stock price will reach $250 per share.
First, Instagram, the picture app acquired by Facebook in 2012, will see its revenue skyrocket.
In 2016, Facebook generated between $650 and $750 million in revenue from Instagram. In 2021, research site Statista projects Instagram will generate $9.5 billion in revenue.
That's potentially more than 1,000% growth in revenue.
Second, Facebook will also generate billions in revenue from its virtual reality (VR) company, Oculus VR.
Zuckerberg paid $2 billion for Oculus VR in 2014, but it will soon pay for itself. By 2020, research company Tractica believes $21.8 billion will be generated from sales of VR head-mounted displays, VR content, and VR accessories.
Those to catalysts alone could propel Facebook higher.
"There is no question in my mind at this point that Facebook will hit $250. The only question is when, and 2020 strikes me as a solid forecast at this point," Robinson said.
From today's opening price of $178.57, that's a potential profit of 40%. But that doesn't mean the Facebook stock price would stop climbing after it hits $250.
If there are two things Zuckerberg knows, they're how to scale a business and how to make shareholders a ton of money along the way.
But if you're looking for another exiting opportunity in tech, we also had to make sure Money Morning readers had access to all the data about a stunning new breakthrough...
Critical: FCC Approves Revolutionary Device
It's a stunning breakthrough that's set to spark the most monumental life-changing transformation you'll ever see.
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