The stock increased 1.9 percent to $41.34 at the close in . Earlier, it touched $41.94, the highest intraday price since Facebook’s first trading day on May 18, 2012. The have advanced 55 percent 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. Concern about Facebook’s ability to sell more ads for wireless devices weighed on the shares after its $16 billion IPO, the largest technology offering on record. In a sign that Chief Executive Officer is making progress in mobile, Facebook last month said promotions on smartphones and tablets generated 41 percent of quarterly advertising revenue, helped by new marketing tools.
“The market is gaining confidence that Facebook is going to be a viable profit-generating machine in the future,” said Laurence Balter, an analyst at Oracle Investment Research in Fox Island,. “People are checking their Facebook page more and more all the time.”
Facebook shares are now trading at about 180 times earnings. That’s a greater price-to-earnings ratio than all except three companies in the , according to data compiled by Bloomberg. A higher multiple can signal that investors think the company may report stronger profit growth in the future.
At a market valuation of $100.7 billion, the , California-based company joins a list of technology companies worth more than $100 billion that includes online retailer, valued at about $130 billion, and chipmaker ., which has a market capitalization of about $111 billion. Still, Facebook remains much smaller than iPhone maker , the most valuable U.S. company at more than $450 billion, and , with a market capitalization of about $289 billion.
The shares have climbed 56 percent since July 24, when the company reported second-quarter results that topped analysts’ estimates. Revenue rose 53 percent to $1.81 billion, topping the average prediction of $1.62 billion. Profit excluding certain items was 19 cents a share, while analysts had projected profit of 14 cents.
As it makes strides in mobile advertising, Facebook is pruning features that are underperforming. The company is phasing out physical goods from its gift-giving feature, which let users buy and send items to their friends through the website. Instead, the service will focus on gift cards, which made up about 80 percent of the program’s transactions since it was unveiled late last year, the company said.
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