The momentum from last week’s blowout second-quarter report has pushed Facebook (FB) ahead nearly 45% since last Wednesday, and today sent shares just above its $38 IPO pricing for the first time since FB shares went public.
Granted, Facebook stock only stayed above that level for a matter of minutes, but there’s no arguing that FB is on a tear.
Once again, Mark Zuckerberg has shown he has the right stuff, outlasting other founders like Zynga’s (ZNGA) Mark Pincus and Groupon’s (GRPN) Andrew Mason, and showing that he might have the rare skill-set that incorporates both building a multibillion-dollar company and managing one.
Only a few have been able to do both, such as Microsoft’s (MSFT) Bill Gates, Oracle’s (ORCL) Larry Ellison or Amazon’s (AMZN) Jeff Bezos. They not only were able to manage complex organizations, but also dealt with emerging threats.
Zuckerberg has shown he can pull this off, too, turning the doubters into believers thanks in large part to his site’s highly successful transition to mobile.
For Q2, daily active mobile users shot up by 51% to 819 million. But more importantly, Zuckerberg has been aggressive with monetization, with revenues up 53% year-over-year to $1.81 billion. About 41% of ad revenues now come from mobile sources, which is a far cry from the nonexistent contribution when Facebook came public.
To get this done, Zuckerberg has made bold investments. For one, he put together the Facebook for Every Phone program that focuses on feature phones, rather than smartphones — a plan designed to bring in people from other countries with much lower income. The segment now boasts about 100 million monthly active users.
Zuckerberg also has put lots of resources into building a much more effective ad-management system with improved targeting and analytics, which has drawn in more than 1 million active advertisers.
So yes, Zuckerberg has shown that social media is a real business — and one that still has lots of growth potential.
As a result, the buzz is that we’ll see a return of IPOs in the space. Of course, the most notable candidate is Twitter. Twitter has a global mega-brand, serious mobile chops and more than 20 million active users who send about 400 million tweets per day. The company also is expected to double revenues to $582 million this year, according to eMarketer, and could reach $1 billion in 2014.
While it’s true that CEO Dick Costolo and co-founder Jack Dorsey have played down the prospects of a deal, the timing is looking a heck of a lot better right now than it has since Facebook went public.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.