Thursday, July 25, 2013 6:57 pm
Facebook shares soar 30 percent on big 2Q
By The Associated Press
The stock is trading at levels not seen since shortly after Facebook's initial public offering last year. The IPO was plagued by nagging questions about whether the world's biggest social network 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 ads 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 the company's shares rocketed Thursday.
Facebook's stock jumped 30 percent in Thursday's trading to close at $34.36.
Facebook Inc., based in Menlo, Calif., priced its stock at $38 when it 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.
The recent quarter, Goldman believes, should help mitigate those fears.
In addition to Goldman Sachs, Deutsche Bank, BMO Capital Markets, Jefferies & Co. and Wedbush raised their price targets for the stock.
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.