12th December 2013
Social networking giant Facebook is being promoted to the S&P 500 in the index’s latest reshuffle writes Philip Scott.
Facebook is replacing automatic test equipment supplier Teradyne Inc. on the US’s benchmark index, which houses some of the world’s biggest corporations and is often viewed as a measure of the country’s economic well-being.
Following Facebook’s controversial initial public offering in 2012, which saw its shares plummet shortly after listing, the group headed by Mark Zuckerberg, has seen its shares bounce strongly back notching up a 76% rise over the past year and soaring by 150% in just the past six months on the back of stronger earnings and advertising sales.
Analysts have welcomed the news of its elevation to the S&P 500 as the stock has jumped 2% over the week and according to Digital Look, the broker consensus has rated the shares a ‘strong buy’.
In its third quarter results published at the end of October it announced that revenue for the three months came to $2.02bn, a 60% increase, compared with $1.26bn compared to the same time last year.
As of September this year the group has on average 727m daily active users, an increase of 25% year-over-year. Facebook, which was originally founded in 2004 and presently employs almost 5,800 workers is currently trading at circa $49 per share.