On Thursday, Facebook finally began to see good news. The popular social network’s stock closed at $28.29, up 3.7% for the day and 4.4% so far this week.
It looks like the Facebook stock may be turning around. After three consecutive weekly losses since its initial $38 pricing, the stock looks ready to achieve its first weekly gain. And if it finishes around only 26% lower than its initial offering, Facebook will have only the second-worst $1-billion month opening ever.
The stock gain follows Facebook’s announcement about its new advertising-bidding system. Called “Facebook Exchange,” the new system allows advertisers to bid on a specific ad impression in real time. For example, if a user searches a flight but does not purchase the airline tickets, a travel site can view this information in real-time and show this person a related ad on Facebook, according to the Wall Street Journal. As experts have worried that Facebook is unable to diversify its revenue model, Facebook Exchange tells investors that the company is trying to expand its revenue base.
It’s uncertain where the stock will go next. With the economy’s broader weaknesses, the stock will likely not soar anytime soon. But positive news may slow down the number of short sellers and relax the bitter lawsuits and investigation. If Facebook takes advantage of the positive energy and makes encouraging public statements that hint at future improvements such as Facebook Exchange, it may reassure investors. See 7 things that could affect the FB stock price.
In any case, Facebook has a long way to go. The stock is still down 26% from its initial $38 pricing and has lost $27 billion in market capitalization so far. The highly anticipated social networking stock has been up for only eight trading days and down on 11, bottoming at $25.87 on June 5. Investors will monitor the stock closely to see if the positive trend will continue.