Facebook shares soar on big 2Q
Facebook shares soared Thursday after the social media giant pushed aggressively into mobile advertising and reported much-improved second-quarter revenue and profit.business Updated: Jul 26, 2013 11:24 IST
Facebook shares soared Thursday after the social media giant pushed aggressively into mobile advertising and reported much-improved second-quarter revenue and profit.
The stock is trading at levels not seen since shortly after its IPO last year, partly due to nagging questions about whether it could follow users on to the mobile phones and tablets that have upended the technology sector.
Facebook began showing mobile advertisements for the first time last spring. It reported after the market closed Wednesday that those advertisements accounted for 41 percent of its total advertising revenue in the most recent quarter.
Overall revenue jumped 53 percent to $1.81 billion for the period. It also reversed a year-ago loss.
Those numbers evaporated doubts about Facebook's ability to capitalize on the mobile market, and trading volume in company shares rocketed Thursday.
Facebook's stock jumped 30 percent in Thursday's trading to close at $34.36.
The stock of Facebook Inc. priced at $38 when the company went public in May 2012.
Goldman Sachs said Thursday that with concern about the company's growth prospects compounding monthly, everyone had been waiting for a breakout quarter. This quarter, Goldman believes, should help mitigate those fears.
In addition to Goldman Sachs, Deutsche Bank, BMO Capital Markets, Wedbush and Jefferies & Co. raised their price targets.
Wedbush analyst Michael Pachter called Facebook a "new king of phones" and said he expects revenue growth to be supplemented next year, as Facebook starts making money from its Instagram photo and video-sharing service.