With third – quarter results, Facebook surpassed GE and Amazon to become the sixth largest company in the world.
Facebook – the No. 1 Social Media company is now worth $308 billion. That not only puts Facebook ahead of General Electric but also makes Facebook the sixth most valuable company in the world in the S&P 500. Amazon Inc., which is valued at $307 billion, is also overtaken by Facebook.
The substantial rise of Facebook in stock market must be a stunner. Since the very first days of this company in 2012, Facebook has seen much changes in its shares. Its stock was first sold for $38 a share but it closed at 106.49 a share now, more than a hundred times higher than the start. In most of Thurday’s trading day, it was up for nearly 5% for the session midday.
Facebook is exactly a profit machine. According to a report issued by S&P Capital IQ, Facebook has generated $ 2.8 billion dollar net income on revenue of approximately $16 billion over the past financial year. The number is believed to steeply increase day by day. Adjusted profit of Facebook is predicted to increase by 22% this year and about 31% next year.
So what are the keys of this social media giant’s success?
As what Scott Kessler – an equity analyst from S&P Capital IQ noted, Facebook is the corporation that they feel most comfortable and confident. He implied that with newer product initiatives such as WhatsApp, Instargram and Messenger, Facebook has just only taken the very first step in deriving benefits. This success paves the way for this firm to a promising future. Kessler also mentioned Facebook’s Virtual Reality technique as an important contributing factors in the notable success of this company this quarter.
With over 1.5 billion people all over the world using its product, Facebook surely deserves that impressive result. “They’re profitable, and if they choose to harvest their profits, they could be immensely profitable. Average revenue per user will be over $10 this year and closer to $14 next year, and they’re just getting started”, said Michael Pachter, Managing Director of Equity Research at Wedbush Securities.
Facebook is expected to gain the fifth position in the world’s market value rank. The 12 month price target of S&P Capital IQ is $130. As it estimated, Facebook may have a market cap of more than 370 billion dollars. That is to say, this behemoth will possibly surpass Berkshire Hathaway Inc, which is now the fifth in ten biggest corporation in the world.
A promising future is ahead.