On Wednesday morning, Facebook’s stock crossed an important psychological barrier, trading for the first time above $38 a share, the price at which the company, the world’s leading social network, first sold shares to the public in May 2012, Vindu Goel reports.
The catalyst for the rise was the company’s surprisingly strong second-quarter earnings report last Wednesday, which quelled many investors’ doubts about Facebook’s ability to make money from its legions of mobile users and suggested that its profit stream would keep growing.
Since last week’s report, shares have risen about 34 percent. Early Wednesday, they briefly touched $38.31 a share, although they pulled back to close at $36.80 a share.
The company’s shares hit a low of $17.55 last fall. Since then, investors have warmed to the company as its management demonstrated that it could increase profit and not just users.
“There was a perception that they hadn’t monetized the users they have,†said Aaron Kessler, an analyst at the Raymond James brokerage firm, referring to last summer.
