Facebook Inc. rose above its $38 initial public offering price for the first time since its debut trading day, capping a 14-month comeback fueled by innovations in mobile advertising.
Facebook increased less than 1% to $37.90 at 10:05 a.m. in New York, and earlier touched $38.31 for the highest intraday price since the May 18, 2012 IPO. The shares had tumbled to a low of $17.55 in September.
Chief Executive Officer Mark Zuckerberg is benefiting from surging demand for mobile ads as more users access Facebook on smartphones and tablets. By letting marketers show messages in the news feed on such devices, and shifting development efforts toward applications, Zuckerberg is delivering on his promise of making Facebook a “mobile-first” company, according to Jordan Rohan, an analyst at Stifel Nicolaus & Co. in New York.
The number of mobile users expanded 51% to 819 million during the second quarter, Facebook said last week. Revenue rose 53% to $1.81 billion, topping analysts’ average projection for sales of $1.62 billion, according to data compiled by Bloomberg.
That helped quiet concerns, voiced by analysts and investors since Facebook’s IPO last year, that the rising popularity of smartphones and tablets is outpacing its ability to make money selling promotions to mobile users.
To bolster revenue, Zuckerberg has been focusing mobile software and refining features that help marketers show messages in the news feed of users’ wireless devices.
Facebook Inc., seeking to break the long-held dominance of television over advertising budgets, plans to sell TV-style commercials on its site for as much as $2.5 million a day, two people familiar with the matter said this week.
The world’s largest social-networking site, which has 1.15 billion members, expects to start offering 15-second spots to advertisers later this year, those people said.