Business

Facebook shares rising, buoyed by ad gains

Facebook co-founder and chief executive Mark Zuckerberg.

REUTERS/File

Facebook co-founder and chief executive Mark Zuckerberg.

SAN FRANCISCO — Facebook’s market value passed $100 billion amid optimism that the world’s largest social network can bolster sales from mobile advertising.

The stock increased 2.6 percent to $41.61 at 12:45 p.m. in New York. Earlier, it touched $41.94, the highest intraday price since Facebook’s first trading day on May 18, 2012. Before Monday, the shares had advanced 52 percent this year, compared with a 17 percent gain in the Standard & Poor’s 500 index.The stock closed at $41.34, up 79 cents.

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The burgeoning market value is a turnabout for Facebook, which slumped as low as $17.73 in September. Concern about Facebook’s ability to sell more ads for wireless devices weighed on the shares after its $16 billion IPO, the largest technology offering on record.

In a sign that its chief executive, Mark Zuckerberg, is making progress in mobile, Facebook last month said promotions on smartphones and tablets generated 41 percent of quarterly advertising revenue, helped by new marketing tools.

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‘‘The market is gaining confidence that Facebook is going to be a viable profit-generating machine in the future,’’ said Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Wash.

‘‘People are checking their Facebook page more and more all the time,’’ Balter said

Facebook shares are now trading at about 180 times earnings. That’s a greater price-to-earnings ratio than all except three companies in the S&P 500, according to data compiled by Bloomberg. A higher multiple can signal that investors think the company may report stronger profit growth in the future.

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At this market valuation, the company joins a list of technology companies worth more than $100 billion that includes online retailer Amazon.com Inc., valued at about $132 billion, and chipmaker Intel Corp., which has a market capitalization of about $112 billion.

Still, Facebook remains much smaller than iPhone-maker Apple Inc., the most valuable US company at more than $450 billion, and Google Inc., with a market capitalization of about $290 billion.

Facebook’s shares have climbed more than 50 percent since July 24, when the company reported second-quarter results that topped analysts’ estimates. Revenue rose 53 percent to $1.81 billion, topping the average prediction of $1.62 billion. Profit excluding certain items was 19 cents a share, while analysts had projected profit of 14 cents. The stock is approaching its record high of $45, which it set on the day of its trading debut.

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