Media

Facebook Shares Rise 40% This Year

Facebook Inc. (NASDAQ: FB) has erased the memory of the debacle of its first week as a public company. It has also shed worries that it could not get its members to use its services on portable devices. Facebook has left all of that behind to the tune of a 40% increase in its share price in 2014.

Facebook’s current market cap, at a share price of $81, is $225 billion. That is higher than Coca-Cola Co.’s (NYSE: KO), Verizon Communications Inc.’s (NYSE: VZ) or Bank of America Corp.’s (NYSE: BAC). Each has revenue many times Facebook’s. Facebook shares are the ultimate market bet on the future.

Facebook’s revenue in the third quarter was only $3.2 billion, and its net income just $806 million. That is not a very good margin, as tech companies go, but its top line and bottom line are growing at 50%. Facebook’s argument for its market cap is its 1.35 billion monthly active users. The figure grew 14% from the same period a year earlier.

That slow grow of monthly active users may be the reason that Facebook’s shares have started to flatten at the end of 2014. The price is barely better than it was in mid-October.

Pessimists about Facebook’s future point to Twitter Inc. (NYSE: TWTR) and Instagram. Presumably, people use more than one of these services. Those anxious about Facebook’s future are more concerned about how much time people spend using is competition than raw member account figures.

ALSO READ: Why Another Analyst Says to Buy Twitter

Finally, the question about whether advertisers will find Facebook an ideal medium for their marketing messages is up in the air. One single television company — CBS Corp. (NYSE: CBS) — has larger revenue than Facebook. Also, CBS has a very modest portion of the ad revenue that goes to U.S. media. The ladder Facebook has to climb is high. The trust marketers have in new media is limited so far; thus, Facebook’s extremely modest revenue.

The next 40% growth in the value of Facebook shares will be much more challenging.

[protected-iframe id=”f63e45628cc61353df3532c9bfe651b1-5450697-30366712″ info=”//companies.findthebest.com/w/5Ijv1115Hgh” width=”600″ height=”400″ frameborder=”0″ scrolling=”no”]

The Average American Is Losing Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4% today, and inflation is much higher. Checking accounts are even worse.

Every day you don’t move to a high-yield savings account that beats inflation, you lose more and more value.

But there is good news. To win qualified customers, some accounts are paying 9-10x this national average. That’s an incredible way to keep your money safe, and get paid at the same time. Our top pick for high yield savings accounts includes other one time cash bonuses, and is FDIC insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes and your money could be working for you.

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.