Facebook shares rose above the $38 initial public offering price for the first time since it went public in May 2012 (Photo by Justin Sullivan/Getty Images) Photograph: Justin Sullivan/Getty Images
Wall Street likes Facebook again. Shares in the social network today returned to their flotation price for the first time since its disastrous initial public offering (IPO) last year.
Facebook's shares touched above the milestone $38-a-share float price on New York's Nasdaq exchange on Wednesday morning, before slipping down to $36.70.
The shares have soared by more than 40% since last Wednesday, when Facebook reported a massive surge in mobile advertising revenue.
The rapid share price increase values the company, founded by a 20-year-old Mark Zuckerberg in his Harvard dorm room less than a decade ago, at just under $92bn (?60bn) ? about eight times the value of Marks & Spencer (founded 1884).
Zuckerberg's paper fortune has risen by just under $5bn in a week to nearly $17bn, according to the Bloomberg billionaires index.
The 29-year-old ? known for his trademark blue hoodies and desire to maintain a relatively simple life despite his vast wealth ? has jumped from the 75th to 42nd richest person in the world, leapfrogging Microsoft boss Steve Ballmer and Dell founder Michael Dell along the way. Microsoft founder Bill Gates, 57, remains the richest person in the world with a net worth of $72bn. Mexico's Carlos Slim, 73, is $5.5bn behind Gates.
Facebook's shares have not been able to hold above the $38 float price since its 18?May 2012 debut, when Facebook's underwriters were forced to buy stock to stop the stock falling below the issue price. By the end of that month the shares had crashed by more than $10, wiping more than $4bn off the value of Zuckerberg's fortune in less than two weeks. By August, the shares had dropped a further $10 wiping out almost $50bn of the company's market value.
The recovery only really began in earnest last week when Facebook reported a much better-than-expected 53% increase in revenue to $1.8bn in the three months to the end of June.
Wall Street was particularly impressed with the company recording a 51% increase in mobile users to 819m. Previously, analysts had openly mocked Zuckerberg's promise to make the company "mobile first".
"We are investing in mobile, measurement, and product innovation," Sheryl Sandberg, Facebook's chief operating officer, said on a conference call with analysts. "The results we're reporting today demonstrate the early returns on these investments."
David Kirkpatrick, author of The Facebook Effect, a history of the company, said: "Very few people saw the pace at which the entire activity of the planet's internet connectivity was going to move toward mobile. It's clearly under way now."
"They've really done a 180-degree shift toward mobile, even if it was somewhat belatedly," he told Bloomberg.
Source: http://www.theguardian.com/business/2013/jul/31/facebook-shares-soar-advertising-revenue-mobile
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