San Francisco - Facebook’s market value passed $100 billion (R1 trillion) this week amid optimism that the leading social network can bolster mobile advertising sales.
The stock touched $41.94 in New York on Monday, the highest intraday price since Facebook’s first trading day on May 18, 2012. The shares closed at $41.34 for a 55 percent advance this year, compared with a 16 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 last year. Concern about Facebook’s ability to sell more advertisements for wireless devices weighed on the shares after its $16bn initial public offering, the largest technology listing on record. In a sign that chief executive Mark Zuckerberg is making progress in mobile, Facebook said last month that promotions on smartphones and tablets generated 41 percent of quarterly advertising revenue, helped by new marketing tools.
Facebook shares are now trading at about 180 times earnings. That is a greater price-to-earnings ratio than all except three companies in the S&P500. A higher multiple can signal that investors think the company may report stronger profit growth in the future.