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Facebook Nears IPO Price as Stock Jumps Again

  +Follow July 30, 2013 4:50PM
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Facebook Inc (FB) is fast approaching $38 dollars a share, which is the price Facebook had their IPO at in May 2012. While Facebook is a difficult stock to value, mobile has long been seen as the key to realizing the potential of its 1.1 billion users.

 In April 2013, the social media company announced that they had redesigned their mobile experience to realize the full potential of mobile advertising. The news hinted that Facebook’s stock might be primed for a turnaround. But few predicted to what a degree the stock would rebound.

Since its triumphant second quarter 2013 earnings report on July 25, Facebook stock has skyrocketed 43.11 percent. The news that got investors giddy was that mobile advertising was now 41 percent of the company’s total ad revenue, and that number was expected to continue climbing in Q3. In the previous year’s second quarter, mobile accounted for zero of FB’s revenue.

As investors reap healthy profits on Facebook’s rise (or, for investors who got in at the IPO, at least recoup), analysts are beginning to question whether the stock’s rapid recovery has been too much, too soon. On July 26,  S&P Capital IQ analyst downgraded Facebook from buy to hold, arguing their P/E ratio can’t sustain such a meteoric rise. The company currently trades at 154 times earnings. That’s higher than all but five companies in the S&P 500. To compare, when Facebook had their IPO, their P/E ratio was 85.

But some analysts, despite the jump, remain bullish on Facebook. Brian Wieser of Pivotal Research Group LLC maintains a buy rating on the stock, and says that “at the time of the IPO the market didn’t really understand Facebook’s business. Renowned analyst Michael Pachter of Wedbush Securities backs this notion, claiming that the entire mobile experience encourages users to “check in day in and day out.”

Facebook’s stock was up 6.20 percent to close the day at $37.63 share, just 37 cents short of their IPO, amid exceedingly heavy volume.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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30 Oct 14 21:10:13
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30 Oct 14 21:09:19
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30 Oct 14 20:53:37
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Hotpage
30 Oct 14 20:53:37
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30 Oct 14 20:52:30
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30 Oct 14 20:52:30
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30 Oct 14 20:50:20
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vasquez randi
30 Oct 14 20:48:41
RT @JoeBabe123: Someone is spreading a rumor on $FB that $MYEC will be pumped tomorrow.... I hope not.... We don't need to be pumped
Stock Relay
30 Oct 14 20:48:17
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Brad Wood
30 Oct 14 20:48:12
RT @JoeBabe123: Someone is spreading a rumor on $FB that $MYEC will be pumped tomorrow.... I hope not.... We don't need to be pumped
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30 Oct 14 20:43:33
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Evan Niu
30 Oct 14 20:43:17
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30 Oct 14 20:39:37
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30 Oct 14 20:36:12
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30 Oct 14 20:34:58
RT @ashleyflexing: @TyTooHollywood Yass 😊 $fb
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30 Oct 14 20:33:51
@TyTooHollywood Yass 😊 $fb
Dave Kelly
30 Oct 14 20:30:37
RT @afmarko99: Twitter Vs Facebook An Advertising Inflection Point http://t.co/paKjGIZqYs $TWTR $FB $GOOG @EVplusEV @evanmedeiros
Joseph Nigro
30 Oct 14 20:28:55
Someone is spreading a rumor on $FB that $MYEC will be pumped tomorrow.... I hope not.... We don't need to be pumped
Leading Signals
30 Oct 14 20:26:07
$FB Facebook has reached a glass ceiling, expect further increased spending with diminished returns. There just isn't enough people. #Sell
Maleah
30 Oct 14 20:13:42
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Mark Donatelli
30 Oct 14 20:13:24
RT @ryanmcraver: Instagram's First Video Ads Appear From Disney, Activision, Lancome, CW, Banana Republic $FB http://t.co/qqXf8SzTQU
jatinam
30 Oct 14 20:07:44
RT @IBDinvestors: LinkedIn is booming in one key market that Facebook and Twitter can't enter http://t.co/Kd4vdFk8Yv $LNKD $FB $TWTR $AAPL
Zacary Mcreath
30 Oct 14 20:07:42
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PennyStock Zone
30 Oct 14 20:01:47
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30 Oct 14 20:00:00
Tickers trending on TWTR in last 1 hour AUDUSD $BAB $BABA $FB Dow Jones http://t.co/dISFzJ8qgR
Consestimate
30 Oct 14 19:57:24
Citigroup legal costs up by $600m. $C, $FB. http://t.co/ud6vSIRgUO http://t.co/tydBrbIDSh
Ben Franklin
30 Oct 14 19:53:41
RT @tim: How Facebook accounts for its WhatsApp buy: $2bn for users, $448m for brand, $288m for tech, $15bn in "goodwill". $FB http://t.co/…
$FB Stock Watch
30 Oct 14 19:52:05
Facebook Inc (FB) Apps Get Low Ratings From Users http://t.co/tbCba2DQdD $FB
$FB Stock Watch
30 Oct 14 19:52:04
Facebook Inc (FB)'s New Money Splash Will Be The Real Deal http://t.co/z2YaMvcaki $FB
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30 Oct 14 19:52:04
Facebook, Inc. Stock: This Earnings Pullback is a Clear Buying Opportunity http://t.co/JQ1mgLcgw3 $FB
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30 Oct 14 19:52:03
Facebook Inc (FB) To Continue Aggressive Spending http://t.co/QiU5G9crtB $FB
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30 Oct 14 19:42:35
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US Banking News
30 Oct 14 19:42:00
Facebook Stock Rating Reaffirmed by Credit Suisse $FB http://t.co/KRsk6f71ya
jedimarkus
30 Oct 14 19:41:01
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30 Oct 14 19:39:01
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30 Oct 14 19:39:01
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30 Oct 14 19:29:31
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30 Oct 14 19:28:35
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30 Oct 14 19:26:06
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30 Oct 14 19:07:58
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30 Oct 14 19:01:40
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  +Follow July 30, 2013 4:50PM
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