Boom! Facebook #winning on mobile lifts stock to record high
SAN FRANCISCO -- Facebook’s stock soared to a record high of $62.50 in midday trading Thursday, lifted by a wildly better-than-expected fourth-quarter showing, especially when it comes to clocking mobile advertising revenue.
The giant social network, which turns 10 next week, said Wednesday that for the first time, more than half of its ad revenue came from mobile. And, at the end of 2013, more than three quarters of Facebook’s 1.23 billion users logged in using their mobile devices at least once a month.
Facebook Chief Executive Mark Zuckerberg proudly declared on the earnings call that his is a “mobile company.”
The shift to mobile was “not as quick as it should have been,” Zuckerberg told Business Week, but “one of the things that characterizes our company is that we are pretty strong-willed.”
Among the converts: S&P Capital IQ analyst Scott Kessler, who raised his 12-month target to $72 from $58.
Facebook handily beat his fourth-quarter forecast, with revenue jumping 63% versus his estimate of 45%, and Facebook continuing to step on the gas in ad sales, Kessler said.
“Advertising revenue growth accelerated for six straight quarters, owing in large part to a continuing focus on, and success in, mobile,” he said.
“Wow!” Macquarie Capital analyst Ben Schachter wrote in a research report.
“So it turns out that a massive and engaged user base with relevant ads can generate a lot of revenue growth. While expectations were high ahead of Q4, Facebook topped even the most optimistic views on nearly every metric,” he said. “The management team has now built up significant credibility.”
All’s quiet on the Facebook skeptics front. I’m guessing there will be no more calls –- at least for a while, including from this newspaper -- for Zuckerberg to take his hoodie and step down.
In fact, the way things are going it looks as if his company will be the fastest in history to reach $150 billion in market value. Facebook shares are up $8.39, or nearly 16%, to $61.92 in midday trading.
“The bottom line is that as long as Facebook’s engagement remains solid, its biggest challenge will continue to be prioritizing and executing against its revenue opportunities,” Schachter said.
And that’s the kind of challenge any company would like to have.
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