Facebook Inc (NASDAQ:FB), by all accounts, had one of the most disastrous IPOs in recent history and still remains embroiled in a number of lawsuits stemming from the debacle. Rather than focusing on the negative, however, it’s important to look at what reaching the $50 mark and an all time high means to Zuckerberg and the company.
Fundamental momentum of Facebook
CNBC brought in two market experts today asking them their take on events, and neither was hesitant to say that Facebook Inc (NASDAQ:FB) will not let up in the near future.
“The fundamental momentum that Facebook Inc (NASDAQ:FB) has in its three main advertising businesses … all of those businesses are really, really hitting their stride right now,” said Jordan Rohan, managing director and senior analyst at Stifel Nicolaus.
The three areas to which he was referring are the downloads it sells to developers, brand advertising from major consumer companies like Nike Inc (NYSE:NKE) and others as well as response-based advertising on the Facebook exchange.
Consequently, he said, “the chances for earnings upside are very, very high and I think the stock will probably continue to work.”
Facebook to gain more valuation
Rohan added that Twitter’s IPO shows a “further validation of the [social media] business model” that has advertisers continuing to seek out conversations and engagement with its customers over new and existing platforms. Additionally, Rohan believes that video advertizing and the monetization of Instagram represent two yet to be realized revenue streams that add to Facebook’s upside.
Chris Baggini, Facebook Inc (NASDAQ:FB) shareholder and senior portfolio manager at Turner Titan Fund, told “Squawk on the Street” that both he and his firm have an even longer view on the stock than Rohan. “Our belief over time is that it is going to be a materially bigger company. You’re looking at a company that should be doing close to $10 billion, if not higher than $10 billion in revenue next year,” he stated.
Facebook’s market share
“There is no other place in the media where you can find a company with 15 to 20 percent market share of the space that they rule, basically,” he added. “This company is a winner. …It still has more room to run. The momentum is there and the revenue growth is accelerating.”
While younger users may be leaving the site as their parents join, Facebook Inc (NASDAQ:FB) is still growing. This is especially true in mobile where he cited data from comScore.
“Their share in the mobile area is so much higher than everybody else that if you’re an advertiser, you have to look at Facebook Inc (NASDAQ:FB), you just have to. You have no other choice,” he said.