Facebook breaks above $50 for the first time

Social media giant Facebook has been setting fresh highs all week and today has been no different, with its share price advancing more than 1% to break above $50 after yet more upgrades.

It’s been a good second half of the year so far for Facebook; rewind back to June and its shares were wallowing around $23 a share, lower than where they had begun the year.

The watershed moment came in July, when the company reported for its second-quarter; not only did it report record revenue that exceeded expectations, but crucially it demonstrated that it was taking great strides in the key area of mobile, increasing mobile income as a proportion of overall advertising revenue from 30% in the first quarter to 41%.

Facebook has never had a problem with the number of users who were on mobile devices, but it was with this set of results that the company put to bed any doubts about whether it was able to satisfactorily monetise those users.

With Facebook trading below $25 as recently as 5 July and crossing the $50 mark today it means that the social network has more than doubled its value in less than a quarter of a year.

Facebook struggled with negative sentiment amongst investors in the wake of its huge IPO, with its shares shedding a large portion of their value in the months that followed the offering, but that has been completely turned around in recent months, and this week we have seen a number of analysts raising their target prices and ratings for the stock. Jefferies today became the latest to join in, lifting its target from $37 to $60.

Facebook continues to enjoy colossal numbers of users: well over a billion monthly active users, for which it has large amounts of data, allowing it to target ads. It also expects to generate advertising income from Instagram in the future. Facebook reports towards the end of next month.

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