Facebook Inc’s stock opened on Monday above US$32 for the first time since July last year, as anticipation about upcoming products and financial results underscored Wall Street’s renewed confidence in the online social network.
Facebook was to host in its California headquarters yesterday its first major press event since its troubled initial public offering in May, triggering a guessing game among technology observers and online blogs about what it could unveil — everything from a smartphone to a search engine.
“There’s a lot of speculation. Nothing to me seems to be that certain,” Jefferies & Co analyst Brian Pitz said.
“If I were to bet, I’d think it was something that was ad-platform related. I’m not convinced on the phone,” said Pitz, citing previous comments by Facebook’s leaders, including chief executive officer Mark Zuckerberg, that making a smartphone would be the “wrong strategy” for Facebook.
In an e-mail to reporters last week, Facebook invited the media to “come and see what we’re building” without providing details.
Some analysts said the stock’s recent gains — shares are up roughly 17 percent since the start of the year — may have more to do with the company’s upcoming fourth-quarter financial results, slated for Jan. 30.
“The stock is up because they have driven a dramatic increase in the ad load of their mobile app which is giving investors hope that they exceeded expectations,” BTIG analyst Richard Greenfield said.
Shares were down about 1.3 percent to US$31.30 in mid-afternoon trading on Monday.
The world’s No. 1 social network with 1 billion users, Facebook became the first US company to debut on stock markets with a value of more than US$100 billion. Its value subsequently plunged by more than 50 percent on mounting concerns about slowing revenue growth and the challenges of making money as users shift from personal computers to mobile devices.
Facebook surprised Wall Street in the third quarter by announcing that mobile ads accounted for 14 percent of its total ad revenue. Some analysts expect the company to report further growth in its nascent mobile ad business for the fourth quarter.
Among the other items that technology blogs and analysts speculate might be unveiled yesterday were new standalone apps for Apple’s iPad tablet, new features to display video ads and even a new wing of corporate headquarters.
Some cautioned that expectations of a game-changing new product were likely to cause disappointment.
“There’s no way they’re announcing anything that has financial impact, or they wouldn’t do it now, they’d wait two weeks,” Wedbush Securities analyst Michael Pachter said, citing Facebook’s upcoming earnings.
“Why would you announce something that has a financial impact during the quiet period?” Pachter said.