Facebook Inc (FB) Sees Shares Soar to All Time High
Facebook Inc (NASDAQ:FB)‘s shares reached a lifetime high on Monday when the company’s share price reached as high as $81.89. Investors’ were not worried over the comments aired by Snapchat CEO last week that Facebook would go in the same way, as Yahoo! Inc. (NASDAQ:YHOO) citing sustainable advertising revenue from established brands.
The company has come a long way to allowing its price to reach an all time high. Facebook came out with an IPO of $16 billion in May 2012. Though it kept a price range of $28 – $35 initially, it raised it to $35 – $38 on strong demand. The stock was priced at $38 and at this price the company was valued over $100 billion.
However, there were cries that the stock was overpriced, and that the shares were mostly hype driven. As if that was not enough, Facebook’s revenue for the June quarter fell short of estimations in 2012. The troubles reflected in the stock price immediately and by August, it lost nearly 50% of its valuation. At the time the company faced severe doubts over mobile strategy.
Facebook did well to recapture the confidence of investors in the last two years. As a result of all-time high price, the company’s market cap reached $227.7 billion currently from around $50 billion in August 2012.
Acquisitions Have Helped
Facebook’s periodical acquisition has undoubtedly helped secure the company’s place. The company acquired Instagram for about $1 billion in 2012. Citigroup Inc (NYSE:C) analysts value the company at approximately $35 billion now that the service has surpassed 300 million, and become larger than Twitter Inc (NYSE:TWTR).
2014 has been a good year for Facebook. The company acquired Oculus Rift, a virtual reality company, for $2 billion, WhatsApp, a messaging app, for $22 billion, and carved out the Facebook messenger as a standalone app. Aside from these, Facebook has unveiled a number of apps on an experimental basis and prepared investors for a year of investments in 2015.
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