Once a dog, Facebook now a hot stock
Shares are up nearly 80% from September lows as analysts and investors see better results and flashier products ahead. Are the shares overbought?
In fact, it's been one of the best stocks since bottoming in early September. With Thursday's close of $31.30, the shares were up 78.4% from their intraday low of $17.55 on Sept. 4. The Nasdaq-100 Index ($NDX) is flat over the same period.
On Wednesday, the shares closed at $30.59, the first close above $30 since July 13. The shares are within $7 of the $38 offering price in its initial public offering.
The reason the stock has been rising has been expectations of decent fourth-quarter results with revenue at around $1.5 billion. That implies growth of $258 million from the third quarter, according to Jim Edwards on Business Insider. Forbes' Robert Hof sees better results as well, although there's still skepticism about the effectiveness of Facebook ads.
And there's excitement building over an event Facebook will hold Tuesday morning at its Menlo Park, Calif., headquarters. The news is a bit of a mystery. All the company would say is "Come and see what we're building." There's talk it could be a Facebook-branded phone, although CEO Mark Zuckerberg said in September a phone didn't make a lot of sense. A phone might sell several million units, but Facebook already has 1 billion users.
There is also talk about a music service, new search functionality, more features and ads for its mobile offerings, new device integration and maybe a bigger push toward gaming.
"Facebook already has one of the largest and most sophisticated data center footprints in the world," he wrote on Seeking Alpha on Thursday. The company "is keenly focused on driving the lowest cost performance per watt in the industry."
Facebook is the poster child for not buying an initial public offering on the first day of trading. The odds are you'll get a better price later.
Facebook went public on May 19 in an initial public offering fraught with problems. The Nasdaq system couldn't get the stock opened on time. There were unfilled orders and other issues. The shares hit $45 that day. When the shares bottomed in September, they were down 53% from the IPO price.
All that said, the stock has some vulnerabilities today. It is selling at significant premiums to its 150-day, 90-day and 50-day moving averages. Its relative strength index is above 70. All suggest the potential of a near-term drop.
More on Money Now
- Is college tuition finally shrinking?
Up 80% from September, down 20% from May. I love that you can use statistics to make anything look as good or as bad as you like!
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Economists find that as women grow more self-reliant, marriages become more about wanting commitment than needing it.
- Obamaphone program: Dialing for fraud?
- Lone Signal lets you tweet aliens for a fee
- Russell Brand swings at 'Morning Joe' -- and scores
- 7-Eleven targeted in human smuggling raid
- Why 'Dumb Ways to Die' became a viral hit
- Red Robin ad doesn't go down well with vegetarians
- Pity the millionaire: Mansions in short supply
- Bloomberg's new crusade: Food scraps
- China eyes stockings that shoo away perverts
[BRIEFING.COM] The major averages ended higher across the board as the S&P 500 advanced 0.8%.
Equities climbed steadily since the opening bell as investors prepared for tomorrow's policy decision from the Federal Reserve. Although chatter in recent weeks has included speculation the Fed would look to taper its asset purchases, today's broad gains suggest investors expect mostly reassuring words from Chairman Bernanke at tomorrow's press conference.
All ten sectors ended with ... More
More Market News
This young tech company has a can't-miss concept, but hasn't yet generated real sales. Should you see its recent slump as a buying opportunity, or reason to stay away?