Facebook Inc shares hit their record high Thursday morning following a surge in revenue from mobile advertising helped the No. 1 social network in the world blast by the expectations on Wall Street for its quarterly revenue and profit.
The share price was up 7.6% to reach $76.54 during early Thursday drawing on Nasdaq. The market valuation of the company at that stock price is just less than $200 billion, which would put Facebook in a position to pass IBM as the fourth biggest tech company listed in the U.S.
The top-3 is led by Apple, Inc, followed by Google and Microsoft.
On Wednesday, Facebook reported that revenue from mobile advertising had increased 151% during the second quarter and accounted for close to 62% of the overall advertising revenue.
Facebook had its initial public offering during May of 2012, which was considered a flop. The stock was originally priced at $38 and dropped for months following its debut due to investors being worried over the ability of the company to earn revenues from advertising on mobile devices.
With increased access to Internet through tablets and smartphones, companies such as Google, Facebook as well as Twitter have looked for different ways to generate additional revenue through the smaller screens.
Facebook now represents close to 20% of the time spent overall on mobile devices.
Quarterly revenue for Facebook was $2.91 billion, which beat Wall Street projections of $2.81 billion. The average per ad price was up 123% compared to the same period last year, but the total impressions of ads dropped by 25%.
The rise in prices was due to an increase in the proportion of ads on the newsfeed, which command higher prices, while the drop in impressions was because of more mobile usage.
The newsfeed ads on Facebook inject marketing messages that are paid directly into the stream of the users’ news and other content.
Stock at Facebook has quadrupled since it touched its all time low of $17.55 during September of 2012.