Facebook parent company Meta Platforms (NASDAQ:FB) plans to officially change its ticker symbol on the Nasdaq exchange to “META” on June 9. This development has the potential to be a catalyst for the badly beaten-down FB stock.
The new ticker symbol follows the company’s rebranding last fall. It changed its name from Facebook to Meta Platforms to better reflect its increasing focus on the metaverse, a digital world where people can interact and transact using virtual reality headsets and other technologies.
Meta Platforms originally planned to change its ticker symbol to “MVRS” last December, but the switch was repeatedly delayed. So far this year, FB stock has declined 42% to about $197 per share.
What Happened With FB Stock
The change in ticker symbol is viewed as the last step Meta Platforms needs to take to shed its old corporate name and transform its identity from Facebook to the creation of the metaverse. The company undertook its rebrand last October to reflect its ambitions beyond social media.
Meta Platforms initially said it would change its stock ticker to “MVRS” on Dec. 1. But the company later backpedaled, saying it was delaying the change to the first quarter of this year. It then repeatedly put off the change in subsequent months.
One of the reasons for the delay may have been that Roundhill Investments had been using the “META” ticker for its Roundhill Ball Metaverse ETF (NYSEARCA:METV). However, Roundhill recently announced it gave up the ticker symbol, enabling Meta Platforms to grab it.
Why It Matters
Shedding the last of its former Facebook corporate brand is viewed as a good thing by investors and shareholders, many of whom are eager for the company to move on from its social media roots. Throughout last year, Meta came under public fire over accusations that Facebook is used to spread misinformation and political divisiveness.
A former Facebook executive turned whistleblower, Frances Haugen, appeared before Congress to criticize the company’s inaction on issues she said it was well aware of. Following her accusations, the company announced it would rebrand as Meta Platforms to emphasize its focus on virtual reality technologies and lessen its association with social media.
However, the rebrand has not helped FB stock. Following disappointing earnings, Meta Platforms’ share price has cratered this year. The decline has brought the mega-cap technology company’s valuation down. Currently, FB stock is trading at a price-to-earnings (P/E) ratio of 14.6x, which is lower than the P/E ratio of McDonald’s (NYSE:MCD).
The hope now is the change in ticker symbol will serve as a positive catalyst that lifts FB stock out of its current funk and sends the share price higher.
What’s Next for FB Stock
The change in ticker symbol to META won’t happen until June 9. And while the corporate rebrand can be seen as a positive development for the company, there is no guarantee the switch will propel shares of Meta Platforms higher.
That said, Meta Platforms shares are deeply discounted right now. Investors with a long-term horizon might want to buy the dip before the stock potentially moves higher.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.