Facebook (FB) stock, which has been rallying during the past two weeks after a disastrous IPO, is back as the tech sector’s new “comeback kid.”
The social network’s stock opened on May 18 at $42.05 and fluctuated between $45 and $38 throughout the day to close barely above its IPO price, at $38.23, and falling sharply in the following weeks as low as $25.52 – prompting worries among investors and rumors about a potential tech bubble 2.0.
However, Facebook (FB) closed at $33.05 on Friday (up 3.8% for the day, and just down 14% percent from the IPO price). The company’s better performance follows a series of announcements that includes new advertising tools and the fact that FB’s revenue jumped to $1.06 billion in the first three months this year from $731 million last year. The company also said it now has 500 million mobile users and 901 million monthly active users.
In addition, Facebook has been “liked” by a pair of big-name advertisers – Ford and Coca Cola – which is countering the negative effects of General Motor and JC Penney’s statement that the social network’s advertising tools weren’t effective for them. Ford and Coca Cola praised Facebook’s ability to ramp up social marketing and advertising efforts. Ford said it's willing to spend more than 25% of its 2012 ad budget in interactive advertising. Coca Cola said its more than 42 million "likes" position the company as a a powerhouse within the realm of social marketing.
In the meantime, a new IPO revealed that Facebook paid for its $1 billion acquisition of photo-sharing app Instagram with 23 million shares of stock valued at $30.89, plus $300 million cash.