Facebook skyrockets back to within cents of IPO price

After a tumultuous year, the social network's blossoming mobile business has finally made believers out of skeptics.

Jennifer Van Grove Former Senior Writer / News
Jennifer Van Grove covered the social beat for CNET. She loves Boo the dog, CrossFit, and eating vegan. Her jokes are often in poor taste, but her articles are not.
Jennifer Van Grove
2 min read
facebook hacker square
Facebook's Hacker Square at the Menlo Park, Calif., headquarters. Facebook

Fourteen months after listing on the Nasdaq, Facebook has finally circled back to within striking distance of its initial offering price of $38 a share.

Facebook opened Tuesday at $35.65 a share, already up more than 34 percent since it reported stellar second-quarter earnings last week. The social network's shares continued to climb higher on the back of news that Facebook has added another revenue stream that will help it capitalize on its ballooning mobile audience.

The social network reached $37.61 a share by market close on Tuesday, up more than 6 percent for the day and marking the first time Facebook has traded at close to the same value as its IPO price since its market debut in May 18, 2012.

Facebook's return to glory has taken more than year, but the past week has proved the most consequential. The company's stock finally popped last week when Facebook announced that it earned 19 cents per share on $1.81 billion in revenue during the second quarter. Facebook's earnings report astounded investors and analysts alike as it revealed that the social network had managed to make 41 percent of its advertising revenue from its year-old mobile business.

Now, Facebook is being further uplifted by the promise of additional revenue from the 819 million monthly active users of its mobile applications. The social network revealed that, as expected, it would act as a mobile games publisher for small and medium-size application developers wanting to reach larger audiences. The new Mobile Games Publishing program means that Facebook will take a cut of revenue from mobile game makers who turn to the social network for distribution.

Facebook's remarkable gains are especially good news for CEO Mark Zuckerberg, who holds 425 million vested shares and has 60 million additional options. In September, the Facebook chief promised not to sell his shares for at least 12 months as a way to instill investor confidence in the company's then-slumping stock. At the time, Facebook's shares had reached a low of $17.73. Now with Facebook near $38 a share again, Zuckerberg's decision seems especially prudent as his holdings are worth more than double what they were 11 months ago.