Facebook’s strong growth has prompted equity investors to pounce on the stock. The social network is now valued at breathtaking 1,300 billion.
Facebook’s stock rose nearly 6 percent lately to a new record level, after the company published its interim report in late July.
It was mainly the company’s growth which impressed. Revenues in the second quarter were up to $2.9 billion, equivalent to almost 20 billion, an increase of 61 percent compared to the same period in 2013. Analysts average forecast of revenues was exceeded by $100 million.
Growth is driven by revenues from mobile advertising, which in the quarter accounted for almost two thirds of Facebook’s total ad revenue. Even in terms of number of active users of Facebook is growing very sharply, and the network now has a total of over 1.3 billion monthly users.
Sharp rally in the wake of the interim report means that Facebook is now valued at more than $190 billion. It is, according to Reuters, a market capitalization in line with, for example IT giant IBM.
It is clear that investors are extremely optimistic about Facebook’s prospects – the valuation is about 80 times higher than the profit that the has company shown the last 12 months.
Previous Post » Modest Gains in an Unsure Market
