Meta shares drop 20% on Q4 earnings miss, weak outlook
It is very common for stocks to significantly rise or fall after the release of earnings reports. If stocks always went up after their earnings report, it would make sense to buy the stock beforehand and sell immediately afterwards. Conversely, if the stock always went down after earnings, it would make sense to sell the stock right before the report was released and rebuy afterwards.I noticed that often times these dips lead to sensationalist headlines like "Apple shares tank 5% after abysmal earnings". When I looked into these headlines, I often noticed that the stock often "plummeted" to the price it was at a week or two prior.To counter this, one metric I use is, "When was the last time the stock was at this new price?"Today Facebook shares are trading at ~$238. The last time it was trading at this price was June 2020.