Facebook Inc.’s shares jumped Wednesday, posting its biggest one-day percentage gain since the social networking company went public in May.
Facebook (US:FB) rose 7.7% to close at $20.93. The stock was still off 45% from its initial public offering price of $38.
The rally was sparked by Chief Executive Mark Zuckerberg’s remarks Tuesday at the TechCrunch Disrupt conference in San Francisco, where he spoke optimistically about Facebook’s ability to sell ads on mobile platforms.
Facebook’s stock has taken a hit amid questions about its ability to compete in the mobile-ad market.
J.P. Morgan analyst Doug Anmuth maintained an overweight rating on Facebook saying: “We remain positive on Facebook as we expect advertising revenue to reaccelerate in the second half of 2012 and into 2013.”
Still, some analysts were cautiously optimistic. Needham analyst Laura Martin kept a buy rating, but cut her price target to $25 from $40.
“We continue to believe in the long-term option upside value of the Facebook global platform, especially for video and commerce applications, and the long-term economic upside associated with its 900 million users,” she wrote.
But she also noted that Facebook, “with some of the smartest employees on planet Earth, has been slow to monetize consumers’ rapid shift from desktop to mobile, compared with peers.”
Evercore Partners Ken Sena also cut his price target to $23 from $34, writing in a note: ”In spite of the stock’s 50% slide since the IPO, we expect shares to remain volatile until U.S. traffic trends show signs of stability or more tangible signs of mobile progress become clear.”
On Tuesday, Zuckerberg also said a Facebook team is working on a search platform, confirming speculation that the company plans to aggressively focus on that market in a direct challenge to rival Google Inc.
In a note, Jefferies analyst Brian Pitz said: “Overall, we see upside as Facebook users increasingly search for brands, places, and apps — inherently valuable commercially-oriented queries.”
“But we won’t get too excited until we hear more details, and we note the overlap with Google is low,” he added. Shares of Google (US:GOOG) were trading down 1% at last check.
Post a Comment