Facebook shares break $45 for first time since 2012 IPO
SAN FRANCISCO (Reuters) - Shares of Facebook Inc rose more than 3 percent to a new high Wednesday, valuing the world's No. 1 social network at $106 billion, as investors focused on its recent mobile advertising advances ahead of a speech by its chief executive.
The stock touched $45 at 1:50 p.m. ET and briefly hit $45.07 shortly after 2 p.m. on the Nasdaq - highs not seen since May 18, 2012, the day of Facebook's initial public offering. It closed at $45.04.
CEO Mark Zuckerberg is expected to speak later Wednesday at the Techcrunch Disrupt conference in San Francisco.
JMP Securities analyst Ronald Josey said investors expect Zuckerberg to discuss future video ad products as well as plans to make money from its Instagram unit. The mobile photo app, acquired in 2012 by Facebook, is popular with young people but does not carry any advertising.
The stock's new intraday high is the latest milestone in its year-long recovery from fears that Facebook would struggle to make money from mobile users at a time when young people go online mostly through their smartphones.
The sentiment changed completely on July 24 when Facebook said its mobile advertising revenue grew 75 percent in the second quarter, trouncing analyst targets and delivering the company's strongest revenue growth since the third quarter of 2011.
The stock has risen 67 percent since then.
"The second quarter was the turning point when a lot of their work over the last year with the newsfeed came through," Josey said, referring to the format of Facebook updates that also carry mobile ads.
"Mobile is very hard to get audience at scale and Facebook is proving that it's one of those places where advertisers can go to reach eyeballs." Continued...