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Facebook Sees Its Shares Hit $38 IPO Price
Originally published on Wed July 31, 2013 4:36 pm
It's been more than a year since Facebook's stock debuted at $38 in its initial public offering. But after a problematic start and an eventual slide below $20, the company saw its shares reach that initial price in early trading Wednesday, one week after it reported strong advertising revenue.
"Before Wednesday's opening bell, the shares rose as high as $38.05, before settling back down to $37.95," the AP reports. "On Tuesday, the shares closed up 6 percent after coming within pennies of the IPO price."
The shares bubbled over the $38 mark several times in the first hour of trading on the NASDAQ market, before hovering just below the mark.
Facebook's stock has found new momentum since last Wednesday, when it reported second-quarter revenue of $1.81 billion, an increase of 53 percent compared with the year-ago quarter. The company said its advertising unit brought in $1.60 billion, with mobile ads accounting for more than 40 percent of that figure.
Several analysts say that while the return to its IPO price is an important occasion for Facebook, the stock's rally might lose energy as some investors who bought into the company at its May 18 debut may sell their shares to break even, several analysts tell CNBC.
Stock analysts are being cautious in making recommendations on Facebook, with the $38 mark being called a psychological barrier.
"In what has to be one of the Street's odder price targets, Stifel Nicolaus analyst Jordan Rohan recently reiterated his 'Buy' rating on the stock and slapped on a target of $38.01," CNBC reports.
Others were less restrained. A headline on the CNN Money site this morning trumpeted, "Facebook's back!"
Update at 4:33 p.m. ET. Facebook Closes Lower:
All the enthusiasm was for not: After a late rally, Facebook's stock actually ended the day lower, closing at $36.80 or about 0.83 lower.