Facebook results drive shares to a 30% gain..hate it or love it..get on board
Shares in Facebook leap by almost a third after it beat earnings expectations with stronger-than-expected mobile ad sales.
On Wednesday, the social networking giant had reported profits of $333m (£217m) in the second quarter.
When trading began in New York, Facebook shares were 25.6% higher at $33.30, the highest since May 2012.
Facebook, which is the world’s largest social networking company, floated on the Nasdaq at $38 a share last year.
Following the release of the latest results, at least 16 brokerages raised their price targets for the firm.
“Facebook has discovered the formula to begin significantly extracting value from its 1.16 billion global users,” said JMP Securities analyst Ronald Josey.
A year ago, Facebook had no mobile advertising and many analysts were sceptical about the firm’s ability to make money in the arena.
Internet companies have been struggling with how to display adverts on smaller screens, as more people use their smartphones to access the web.
Facebook’s revenue from smartphones and tablets made up almost half of total advertising revenue in the second quarter.
“Facebook’s massive audience should be irresistible to brand advertisers as the company preps to launch 15-second video ads, which could be Facebook’s next billion-dollar business,” said analysts at Jefferies & Co.
Meanwhile, analysts at Morgan Stanley expect video advertisements to boost Facebook’s revenues by more than 10%.
In a statement, Facebook chief executive Mark Zuckerberg said: “The work we’ve done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future.”
According to chief financial officer David Ebersman, 20 billion minutes a day were spent on Facebook in June.
“This quarter marks the end of our first year as a public company and I think we’ve created a good foundation for the future,” said Mr Zuckerberg on a call to discuss the earnings.
this company will be massive..there is no doubting that..i have said for a while to get on board..you dont have to like them to make money from them..they will go up and up..when you have 1 in every 7 people on earth on your books you have infinite buying and purchasing power..now that they have worked out how to utilize it..