Facebook shares surge 28%, Wall Street sees more ad growth
NEW YORK (REUTERS) - Facebook shares opened 28 per cent higher on Thursday after the company reported a huge jump in mobile advertising revenue, and analysts pointed to further growth from new advertising on Instagram and 15-second videos.
While still short of their IPO price of US$38, the shares hit US$34 - a price not seen since their second day of trading in May last year. At least 16 brokerages raised their price targets by as much as US$9 per share - in sharp contrast to a string of earlier downgrades amid fears it would struggle to make money from mobile advertising.
Revenue from smartphones and tablets made up almost half of total advertising revenue in the second quarter.
"FB's massive audience should be irresistible to brand advertisers as the company preps to launch 15-second video ads, which could be Facebook's next billion-dollar business," analysts at Jefferies & Co wrote in a note.