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What Pushed Facebook Inc. (Nasdaq: FB) Stock to Record Highs This Week

Monday's broad-based rally sent the S&P 500 Index to an intraday record and also helped push Facebook Inc. (Nasdaq: FB) stock to an all-time high of $70.92.

Shares of the social networking giant climbed 3.4%, or 2.33 points, to the new high. Volume was heavy, with 76.63 million shares changing hands – compared to FB's average daily volume of 63 million shares.

Markets got a lift Monday from deal making on Wall Street and improved economic news out of Europe. But the real catalyst propelling FB stock to its record close was fresh backing of its recent WhatsApp purchase, and a changed perception of Facebook as an investment.

Last Wednesday, FB plunked down a whopping $19 billion to buy the rapidly growing mobile messaging app that boasts some 450 million monthly users and is adding more than 1 million users daily.

Initial reactions to the hefty WhatsApp price tag were filled with skepticism. Critics were quick to comment that Facebook Chief Executive Officer Mark Zuckerberg is willing to go to any lengths (and price) to remain the dominant social networking player and is buying up the competition.

But upon further review, even skeptical analysts changed their tune.

With this acquisition, Facebook now dominates the global market when we calculate the amount of time spent by individual consumers on their cell phones. Between the Facebook homepage, Instagram, and WhatsApp, the company now has three of the top five applications by consumer time spent per day.

Some even called the WhatsApp purchase a bargain.

The total paid for WhatsApp – $19 billion – means each user costs $42.22. That's lower than the per-user price on most other social Internet sites.

According to USA Today research, if you take each of the following companies' current market capitalization divided by user, you'll get the following per-user prices:

  • $53.19 for online urban guide Yelp Inc. (NYSE: YELP)
  • $84 for professional networking site LinkedIn Corp. (NYSE: LNKD)
  • $126.39 for microblogging site Twitter Inc. (NYSE: TWTR)
  • $409.85 for crowd-sourcing review site Angie's List Inc. (Nasdaq: ANGI)
  • $749.14 for Internet search giant Google Inc. (Nasdaq: GOOG)

But it's not just the good deal of buying WhatsApp that's giving FB stock this upward momentum…

Join the conversation. Click here to jump to comments…

  1. JonsonMarpaung | February 26, 2014


  2. don devaney | February 26, 2014

    FB keeps getting better and I am so proud to be a stock holder!

  3. Shab05 | February 26, 2014

    5 mistake doesn't make 6th mistake right. This is the problem. Instead of stopping it, use it at example to support more mistakes. This is exactly what Fb did. Forced 1 billion purchase on instagram so people can use this as reason to force 19billion purchase. To be frank, many whom i know use whatsup so they can be away from Fb. Now Fb buying whatsup is steadily pushing people away from whats up. Secondly, how can some media so easily justify 19 billion dollor purchase as if its 100$ bill, and for same whatsup, Fb bidded for 4 billion few months back, google bidded 10 billion (not more than 19 billion. infact even 1o billion was considered high by google standards).

    Secondly, FB, and whats up is not the only application available in mobile phone to spend 170 for fb and 19 for whats up. if some people say so, i request them to open their mobile and see what all they have. People are moving away from fb, and now fb had actually spent 19 billion to chase people away from whats up, and for this media supporting and justifying. Fb could have marketted messengers by spending 10 million rather than wasting investors money This is hard time to come back to ethics.

    • Sun | February 26, 2014

      Shabo5 before postif a long comment please do some research. It is not what's up to begin with. And don't confuse snapchat with whatsApp.

  4. shab05 | February 27, 2014

    I know what i wrote. Fb tried to buy Whats up for way lesser price and i believe its 1 billion or 4 billion is what they quoted that time just like snapchat. Thats the reason why they got Fb messenger to compete and failed marketting it. And also, google didnt quote 10 billion for snap chat and hence you may realize what i stated before.

    Neverthless, 19 billion evaluation is still way too high. and Also, comparing Yelp, linked, twitter and google doesnt make sense as their market value is not based on number of users, but also about how many other products they have and what revenue they make, and whether the revenue generating model is lasting and also user growth. but now, it only looks like Fb is selling users in market. Also, If you dont realize, people here are moving away from whats up, and in russia, 5 million moved out in single day. Fb wasted 19 billion, may be because they have more money than required and dont know what to do with it.

  5. H. Craig Bradley | February 27, 2014


    Everyone is in love with Social Media, as its a new sector with promise and profits. Kind of like Peter Pan finding other youngsters to carry on as he gets chronolgocially older. However, Facebook will eventually have a big shake-out at some point to see what is sustainable and what is not. FB will be around because its so big, but can it become the next Goggle or Apple? I think Mark Zuckerberg is trying to piece together something that works by buying other social mobile companies that are in high growth phases. Each time he does something, it creates lots of "buzz". . Seems to be a variant of the Ponzi-Scheme. Maybe the market needs to get back to fundamentals, but first, investors need to grow-up a bit.

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