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Facebook Nears IPO Price as Stock Jumps Again

  +Follow July 30, 2013 4:50PM
Tickers Mentioned:

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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Results for FB
30 Sep 14 22:28:17
Nasdaq100 #Stocks Trend $EBAY $INTU $MU $PAYX $CERN $WYNN $ADSK $CSCO $REGN $EXPE $MNST $TSCO $FB $CELG $CTSH @ http://t.co/YdSIjG11yN
30 Sep 14 22:28:05
30 Sep 14 22:27:43
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30 Sep 14 22:24:39
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30 Sep 14 22:20:21
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30 Sep 14 22:20:13
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30 Sep 14 22:12:38
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30 Sep 14 22:02:48
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30 Sep 14 22:01:29
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30 Sep 14 21:57:42
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30 Sep 14 21:54:20
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David Hegedus
30 Sep 14 21:49:59
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Scott Tatman
30 Sep 14 21:48:35
$FB, $79 Weekly Puts looking tasty here if the Index's selll off. http://t.co/EhNN6FFOQD
Todd Pace
30 Sep 14 21:43:33
$FB still holding the trend lines, not sure if the market is ready for $80 yet though. I'm all cash, ready to go either way with Call or Put
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mark zuckerberg is just a brilliant genius at $FB. never would have thought the SP would be near 80 a year ago
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Todd Pace
30 Sep 14 21:28:33
Out $FB $79 Weekly Calls. Got stopped out at $78.64, LOD was $78.60. It happens. Should have held but losses are part of the game.
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30 Sep 14 21:23:08
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30 Sep 14 21:19:57
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30 Sep 14 21:14:05
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30 Sep 14 21:06:20
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30 Sep 14 20:11:07
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Stock Wire
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  +Follow July 30, 2013 4:50PM



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