Facebook has found redemption in the form of a soaring stock price.
On Wednesday, the share price of the world's most populous social network -and human data repository- briefly crept past $38 for the first time since its rocky public debut last May. In doing so, Facebook cleared a symbolic hurdle that has eluded the company for more than a year.
Facebook's ill-fated first trading day on May 18, 2012 was marred by technological glitches on the Nasdaq stock market. The stock closed with a disappointing 23-cent gain. And its performance didn't improve, hitting a low of $17.55 last September.
"I think Facebook in general and Zuckerberg in particular felt that they let everybody down," said Wedbush analyst Michael Pachter of Facebook Inc.'s 29-year-old founder and CEO, Mark Zuckerberg. "And by everybody I mean all their employees who had stock, all their early private investors who had stock."
On Wednesday, the stock traded as high as $38.31 before closing at $36.80, a price that places the company's value at around $89 billion.
When Facebook's stock was trading around $24 in June, Zuckerberg said at the company's first shareholder meeting, "we understand that a lot of people are disappointed in the performance of the stock and we really are too." He also said that the company takes its responsibility to shareholders "very seriously." But he also stressed that Facebook has always focused on building its long-term value - its user base, its advertising business, the apps that connect to it, its online network. In other words, build it and the value will come.
At the moment, investors agree. Facebook has been on a roll since reporting stronger-than-expected earnings last week. The company posted the largest revenue gain it has seen since late 2011, when it was still a private company. Its stock price is up 39 percent since it reported quarterly results on July 24. In comparison, the Standard & Poor's 500 index has gained less than 1 percent in that time.
Investors are especially upbeat about Facebook's fast-growing mobile advertising revenue, which went from zero at the start of 2012 to $656 million, or 41 percent of