Facebook Market Value Tops $100 Billion Amid Mobile Push

August 27, 2013 Leave a comment

Facebook Market Value Tops $100 Billion Amid Mobile Push

Facebook Inc. (FB)’s market value passed $100 billion amid optimism that the world’s largest social network can bolster sales from mobile advertising.

The stock increased 2.6 percent to $41.61 at 12:45 p.m. in New York. Earlier, it touched $41.94, the highest intraday price since Facebook’s first trading day on May 18, 2012. Before today, the shares had advanced 52 percent this year, compared with a 17 percent gain in the Standard & Poor’s 500 Index.The burgeoning market value is a turnabout for Facebook, which slumped as low as $17.73 in September. Concern about Facebook’s ability to sell more ads for wireless devices weighed on the shares after its $16 billion IPO, the largest technology offering on record. In a sign that Chief Executive Officer Mark Zuckerberg is making progress in mobile, Facebook last month said promotions on smartphones and tablets generated 41 percent of quarterly advertising revenue, helped by new marketing tools.

“The market is gaining confidence that Facebook is going to be a viable profit-generating machine in the future,” said Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Washington. “People are checking their Facebook page more and more all the time.”

P/E Ratio

Facebook shares are now trading at about 180 times earnings. That’s a greater price-to-earnings ratio than all except three companies in the S&P 500, according to data compiled by Bloomberg. A higher multiple can signal that investors think the company may report stronger profit growth in the future.

At this market valuation, the company joins a list of technology companies worth more than $100 billion that includes online retailer Amazon.com Inc. (AMZN), valued at about $132 billion, and chipmaker Intel Corp., which has a market capitalization of about $112 billion. Still, Facebook remains much smaller than iPhone maker Apple Inc. (AAPL), the most valuable U.S. company at more than $450 billion, and Google Inc. (GOOG), with a market capitalization of about $290 billion.

Facebook’s shares have climbed more than 50 percent since July 24, when the company reported second-quarter results that topped analysts’ estimates. Revenue rose 53 percent to $1.81 billion, topping the average prediction of $1.62 billion. Profit excluding certain items was 19 cents a share, while analysts had projected profit of 14 cents.

The stock is approaching its all-time high of $45, which it set on the day of its trading debut.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

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Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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