The stock price of Facebook Inc (NASDAQ:FB) surged by 50 percent since the social network giant reported an outstanding financial performance for the second quarter showing improvement in its mobile advertising business. The shares of the company reached as high as $38.49 per share on Friday, the first time for the stock to trade above its $38 a share initial public offering (IPO) price.
However, the shares of the social network giant are still far from reaching its opening day price at $45 a share. The was the price for most of the buy orders that went in for the stock of Facebook Inc (NASDAQ:FB) on May 18, 2012 as previously noted by one of our colleagues.
Zuckerberg proved he has ability to lead team in right direction
The social network giant obviously regained the confidence of investors with its strong quarterly earnings results, and demonstrated that it is on the right track. The management of the company particularly its chief executive officer, Mark Zuckerberg proved that he has the ability to lead his team in the right direction and achieve its goals.
During a previous stockholders meeting, Zuckerberg expressed that the company understood their disappointment towards the performance of the stock of the company, and he admitted that he is not also happy with it. He assured the shareholders that Facebook Inc (NASDAQ:FB) is doing a great job with its services, engagement, and revenue. He pointed out that the social network giant will continue to grow and told them that he is devoting a meaningful amount of time in reviewing every stage of the company’s product developments and advertising business.
Facebook Inc (NASDAQ:FB) reported that its 41 percent of its revenue was generated from mobile advertising, a significant increase from its 14 percent in the same period a year ago. The result definitely alleviates the concerns of many investors that the company doesn’t have the capacity to boost its profits from mobile devices.
May be a psychological barrier with IPO price
In an interview with Bloomberg, JMP Securities analyst, Ron Josey commented, “It’s been a fantastic run. There may be a psychological barrier there with the IPO price, but that’s not something that’s fundamentally wrong.”
On the other hand, Jordan Rohan, analyst at Stifel Nicolaus & Co. said Zuckerberg is delivering his promise to shareholders that he will transform Facebook Inc (NASDAQ:FB) into a “mobile-first” company. According to him, the CEO succeeded by allowing marketers to show messages in the news feed of wireless devices and shifting the company’s development efforts towards applications.
Facebook Inc (NASDAQ:FB) managed to expand the number of its users in smartphone and tablets to 819 million in the second quarter. Its revenue was $1.81 billion, up by 53 percent .
