Nasdaq: FB
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Investing in Facebook Stock? Keep an Eye on Dec. 12
Facebook stock (Nasdaq: FB) investors are getting an early holiday present.
That's because on Dec. 12, shares of the world's largest social networking company will be added to the Nasdaq 100 Index.
Facebook will have some very good company in the index, joining tech behemoths Apple Inc. (Nasdaq: AAPL), Google Inc. (Nasdaq: GOOG), and Microsoft Corp. (Nasdaq: MSFT). It'll rank 13th by market value ($60 billion).
Snagging a spot in the coveted index, a compilation of the 100 most valuable non-financial stocks traded on the Nasdaq, is the latest in a string of welcome news for Facebook shareholders, especially those bruised in its initial public offering fiasco on May 18.
And the news couldn't have come at a better time for shareholders.
Here's why.
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Is Zynga (Nasdaq: ZNGA) Doomed Without Facebook?
Zynga Inc. (Nasdaq: ZNGA), creator of FarmVille and other popular social games, has lost its special relationship with Facebook.
Zynga and Facebook Inc. (Nasdaq: FB) have had a symbiotic relationship since 2010 by which Zynga was the only provider of social game software that was allowed to promote its games to Facebook's one billion users. In return, Zynga used Facebook's credit system to process payments even on its own Zynga.com games platform.
The close relationship between the two companies had made Zynga the single largest contributor to Facebook revenues outside of advertising. For its part, Zynga is thought to have received about 80% of its revenue from Facebook users.
"We have streamlined our terms with Zynga so that Zynga.com's use of Facebook Platform is governed by the same policies as the rest of the ecosystem," Facebook said in a statement. "We will continue to work with Zynga, just as we do with developers of all sizes."
The popularity of Zynga's games has declined in recent years as users are spending more time playing games on mobile devices. Zynga has had to revise down guidance twice so far this year and that has been reflected in the company's share price, which has fallen by 74% since its IPO in December 2011.
The revised agreement between Zynga and Facebook allows Zynga to market its games more widely.
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Facebook Stock Rises Despite These 852 Million Reasons to Fall
It's difficult to think that an additional 852 million shares of Facebook stock hitting the market wouldn't weigh on the already struggling share price.
That's why, for the third time in nearly as many months, Facebook Inc. (Nasdaq: FB) on Wednesday braced for what could have been the largest selling spree yet to hit the social networking giant.
Scores of early investors and employees were at liberty to sell 778 million shares. Another 31 million in restricted stock, awarded to employees who joined the Menlo Park, CA-based company prior to 2011, were also unbound, along with 48 million shares held by former employees.
The staggering number is almost equal to Facebook's existing 921 million share float, according to data from the company's most current filing with the U.S. Securities and Exchange Commission.
But, a strange thing happened.
Instead of falling amid the torrent of new shares, Facebook's stock rose Wednesday.
Right after the opening bell on Wall Street and for the first half hour of trading, the stock enjoyed a 10% rally. By 2 p.m., it was up nearly 12% at $22.22.
Why? Morningstar analyst Rick Summer says the result could have been that investors were planning to buy today after the price tumbled, and piled into the stock anyway.
"Certainly there was a delay and pent up demand in shares," Summer told ABC News.
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How Facebook (Nasdaq: FB) is Sapping the U.S. Economy
Facebook (Nasdaq: FB) is a drain on the U.S. economy.
No, we're not talking about Facebook's IPO fiasco earlier this year and the subsequent stock price meltdown. It's bigger than that.
Facebook is worst offender among the many Internet distractions keeping workers from getting things done in the office.
Most workers stop what they are doing several times an hour to respond to messages from friends and co-workers on social media like Facebook and Twitter, browse the Internet, and check and respond to e-mail.
And once distracted, it takes time for a worker to get back to the task at hand - one study put the average disruption at 23 minutes.
All those interruptions add up to a massive expense for businesses and the U.S. economy.
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Execs Keep Selling Their Facebook Stock – Time to Worry?
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Why Facebook Stock Soared After Earnings Report
Facebook stock (Nasdaq: FB) was up almost 10% in the first 30 minutes of after-hours trading today (Tuesday) after the release of its third-quarter earnings report, its second as a public company.
Releasing earnings after market close, the social network leader posted earnings per share of 12 cents, on revenue of $1.26 billion, or 32% higher than the year-ago quarter.
While Facebook did not provide an outlook following its uninspiring second quarter release, analysts were looking for 11 cents per share on revenue of $1.2 billion, according to data from Thomas Reuters.
In addition to the earnings beat, the following highlights helped Facebook stock soar after the earnings release:
- Mobile users increased 61% year-over-year
- Monthly active users were up 26% year-over-year
- Daily active users rose 28% year-over-year
"As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices," said Zuckerberg. "People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company."
But this positive vibe doesn't mean Facebook's earnings problems are solved.
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Will a Poor Facebook Earnings Report Seal the Stock's Fate?
The third-quarter Facebook earnings report will come out Oct. 23 after the markets close, and the results are looking increasingly dismal.
Despite a recent milestone (one billion users), a new "want" button feature and a "pay-to-promote post" option, the company has failed to drum up investor and analyst fanfare.
Wall Street shrugged off all of the recent news and Facebook (Nasdaq: FB) stock barely budged, except to move a little lower.
Even CEO Mark Zuckerberg's mid-September interview, which appeared to put some spark back into Facebook's fading shares, now seems like a very distant memory.
Since then, a bevy of analysts have become more bearish on the social network's near-term outlook.
Two analysts have cut estimates, and none have raised projections.
Facebook is now expected to earn 11 cents per share on revenue of $1.23 billion for the third quarter and the average estimate for Facebook's 2012 earnings is 48 cents a share.
And next year's forecast isn't any brighter.
In just the last month, half a dozen analysts have slashed next year's earnings estimates for the company. The current lackluster consensus is for Facebook to earn 62 cents a share in 2013, according to data from MarketWatch.
With its disastrous IPO no longer an excuse for fumbled earnings, the focus has shifted.
Now a public company, FB shareholders want to see growth, escalating earnings, analyst upgrades, insider buying, and a rising stock price.
Instead, they've gotten a stock that might never rebound.
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Facebook Stock Won't be Saved by this "Useless" Idea
Facebook Inc. (Nasdaq: FB) announced today (Thursday) it had finally amassed its one billionth member.
While the company celebrated the landmark number, many analysts simply shrugged it off. So did Facebook stock, which was down about 0.4% by 2 p.m.
As MarketWatch pointed out, "it's great to have one-seventh of the world's population in your network, but Facebook will have to translate that to the bottom line to sustain its upward momentum of late."
Or, as Money Morning wrote a few weeks back, "Congrats on one billion Facebook users... who buy nothing."
Facebook, in order to change that flaw, released a new plan this week to make money off its enormous subscriber base.
But here's why Zuckerberg and team should go back to the drawing board.
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