A day after coming in with a stellar second-quarter earnings report, Facebook finally experienced the type of stock-market pop that it had hoped to see on its first day of trading more than 14 months ago. The social network ended its most successful day of trading up nearly 30 percent.
Facebook closed Wednesday at $26.51 per share, smack-dab in the still super-depressed, mid-$20s range where the social network's stock had been trading for months. Of course, that all changed when Facebook blew everyone away and revealed that it made 41 percent of advertising revenue, or $656 million, from its nascent mobile business.
Facebook's second quarter was shockingly good with $1.81 billion in total revenue and adjusted earnings per share of 19 cents. A day later, the market rewarded the social network with the biggest gains in the history of the company's stock. Facebook opened Thursday at $33.54 a share and closed even higher at $34.36 for a whopping 29.61 percent one-day pop.
It's exactly the kind of make-rich-quick action Facebook had hoped to see on its hotly anticipated IPO day. The social network, if you recall, opened just 11 percent above its $38 offering price and eventually fell back to $38.27 by the closing bell.
Facebook's closing price Thursday finally puts the company back within striking range of its $38 IPO price, and analysts everywhere are adjusting their 12-month price targets. Goldman Sachs, for instance, now expects Facebook to hit $46 a share in 12 months, which is up from a $40 prediction prior to the second-quarter report.