Facebook shares break $50 on the back of mobile ads success
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Friday 27 September 2013
Facebook's shares closed above the $50 mark yesterday, continuing their onward march as the social media giant's success in making money from mobile ads lures investors back into a stock that, when it floated last year, swiftly plunged below its offer price on worries about being overvalued.
Following its listing last year, the shares soon traded below its IPO offer price of $38 apiece and only managed to trade above that level earlier this summer as investors grew more confident in the company's ability to generate cash from mobile ads.
From making almost no money from mobile advertising early last year, the company managed to generate 41 per cent of its advertising revenues for the second quarter of 2013 from mobile ads. Boosted by this success, the stock closed at $50.39, up nearly 2 per cent, last night.
The ability to generate mobile revenues is seen as an important factor for Facebook's continued success, with surveys of web users showing that they are abandoning desktop or laptop computers for smartphones and tablets.
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