Facebook (FB) Stock: Why It Jumped To Record Highs!

Facebook Inc (NASDAQ: FB)

Facebook is having an incredible day in the market today. In fact, after reporting earnings for the first quarter, the company’s stock price has jumped into record territory. Today, we’ll talk about what we saw from earnings, how the market reacted to the news, and what we can expect to see from FB stock moving forward. So, let’s get right to it…

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FB Reports Strong Earnings

As mentioned above, Facebook recently reported its earnings for the most recent quarter with such strong results that the value of the stock has jumped into record territory. Here’s what we saw from the earnings report:

  • Revenue – In terms of revenue, FB produced overwhelmingly positive numbers. During the quarter, analysts expected that the company would generate revenue in the amount of $5.26 billion. However, the company actually generated revenue more than $100 million ahead of expectations, coming in at $5.38 billion.
  • Earnings – As if strong revenue wasn’t enough, FB absolutely blew away analyst expectations with regard to earnings. During the first quarter, analysts expected that the company would generate earnings in the amount of $0.62 per share. However, the company actually reported earnings in the amount of $0.77 per share.
  • Active Users – When it comes to monthly active users, Facebook saw incredible growth as well. During the quarter, the social network enjoyed a total of 1.65 million active users. That number is up 15% year-over-year. Not to mention, mobile active users climbed 21% year-over-year to 1.51 billion.

Finally, following the strong earnings, FB announced that it would be proposing the offering of a new class of stock. Here’s what the company had to say:

If the proposal is approved, we intend to issue two shares of Class C capital stock as a one-time stock dividend in respect of each outstanding share of our Class A and Class B common stock.”

How The Market Reacted To The News

As investors, we know that positive news will likely lead to growth in the value of the stock the news is associated with. Obviously, the news released by FB was overwhelmingly positive. This is leading to incredibly strong gains on the stock. In fact, investors have pushed Facebook into record territory. Currently (9:41), FB stock is trading at $120.02 per share after a gain of $11.14 per share or 10.22% thus far today.

What We Can Expect From FB Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Facebook. The reality is that the company started as a social network. However, these days, it is a way of life for tons of people. With more than a billion and a half active users, strong plans for future growth, and investments in areas outside the internet, FB is poised for strong long-term growth.

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What Do You Think?

Where do you think FB is headed moving forward and why? Let us know your opinion in the comments below!

[Image Courtesy of Wikipedia]

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