Facebook

Facebook yesterday closed at their highest ever level, a lofty $90.22: valuing the social media giant at $253 billion. But how has Facebook got it so right? Remember, as recently as December 2012 the shares had crashed to an all-time low of $17.50 – some $20 below their IPO. At the time, for a tech company to fall dramatically below their IPO price was unheard of. The main catalyst for this negative performance was their mobile advertisement – crucially, at the time Facebook were failing to capitalise on this.  So the transformation to a company that now trades at 87 x earnings comes from a complete change with mobile advertising: now, 66% of ad revenue comes from this.  And what does the future hold? Remember – Facebook owns photo sharing platform Instagram, instant messaging WhatsApp and the virtual reality company Oculus.

Senior Trader, Jordan Hiscott

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