FB: What’s New With Facebook Stock?

by Robert Martin | July 3, 2014 8:11 am

Facebook (FB[1]) stock slid more than 2% yesterday, a slight slide during what’s otherwise been a pretty solid year. Since 2014 kicked off, shares of FB stock have gained around 22% — blowing away rival tech stocks. The Nasdaq, for example, has improved just 7%.

Zoom out to the past 12 months, and Facebook stock is even more eye-popping. Shares were sitting at just under $25 this time in 2013, while FB closed at just over $66 yesterday, despite the small slump.

But beyond the ups and downs of shares, a few other news developments should be on the radar of any serious Facebook stock investors. The company has been making headlines left and right — some good press, some … not so much.

Let’s take a quick look at three things Facebook stock investors should have noticed in the recent news cycle.

The Latest Headlines About FB

• Ads: Perhaps the biggest news (from a Facebook stock investor’s point of view) was just released yesterday — because it should have a direct impact on the company’s quarterly numbers. The Wall Street Journal reported on Wednesday that the social media site is looking to improve its revenue in developing markets via “new, tailored ad formats and more local sales offices.” As the article pointed out, this could be key for continue growth. Referencing one such market, the author writes: “India is one of Facebook’s largest markets with more than 100 million users, up from eight million in 2010. Meanwhile in the U.S., user growth has leveled off as the market has become saturated.”
• Experiments: Before the ad news, there was some News Feed news — and this is what falls into the “not-so-great press” category. Facebook disclosed just last week that it had manipulated some users’ News Feeds as part of a psychology experiment back in 2012 — and boy did the Internet and critics go crazy. In a more recent update, Facebook executive Sheryl Sandberg apologized for the incident just yesterday … kind of. Really, she just apologized for the fact that the study was not communicated more clearly. So, what does this actually mean for Facebook stock? It’s a bit harder to figure out, but InvestorPlace‘s Tom Taulli has a few ideas. He writes, “The brouhaha from the Facebook mood study probably won’t have much impact on the user base, if only because while FB does have competition, there’s no real meaningful, one-for-one alternative. But the trouble could lie down the road, in the form of more regulation, which would make it tougher to leverage data to generate more revenue.”
• Teens: The last thing Facebook stock investors may be interested in is some recent commentary from Motley Fool writer Tim Beyers[2], who cites strong teen usage as a bullish indicator. He cites a recent Forrester Research survey which revealed eight out of 10 teens using Facebook at least once a month and almost half using the site more today than they did a year ago. As he summed it up, “Higher usage should lead to higher engagement, which could, over time, boost ad revenue.” Plus, teens are especially key since they boast 1) more disposable income and 2) are more receptive to mobile ads — which have been a huge push for FB of late.

All in all, recent headlines seem to be a net win for Facebook stock, despite yesterday’s small slide. The recent weeks have seen two potentially revenue-boosting bits of news … and just one very bad one.

What do you think — will teens and developing markets keep Facebook stock chugging higher? Weigh in below in the comments section.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2014/07/facebook-stock-fb-ads/

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