Facebook shares rise in buildup to mystery event, earnings
(Reuters) - Facebook Inc's stock opened on Monday above $32 for the first time since July as
anticipation about upcoming products and financial results underscored
Wall Street's renewed confidence in the online social network.
Facebook will on Tuesday host
its first major press event at its headquarters in Menlo Park,
California, since its troubled initial public offering in May,
triggering a guessing game among technology observers and online blogs
about what it could unveil - everything from a smartphone to a search
engine.
"There's a lot of speculation. Nothing to me seems to be that certain," Jefferies & Co analyst Brian Pitz said.
"If
I were to bet, I'd think it was something that was ad-platform related.
I'm not convinced on the phone," said Pitz, citing previous comments by
Facebook's leaders including CEO Mark Zuckerberg that making a
smartphone would be the "wrong strategy" for Facebook.
In an email to reporters last week, Facebook invited the media to "come and see what we're building" without providing details.
Some
analysts said the stock's recent gains - shares are up roughly 17
percent since the start of the year - may have more to do with the
company's upcoming fourth-quarter financial results, slated for January
30.
"The stock is up because they
have driven a dramatic increase in the ad load of their mobile app which
is giving investors hope that they exceeded expectations," BTIG analyst
Richard Greenfield said.
Shares were down about 1.3 percent to $31.30 in mid-afternoon trading.
The world's No.1 social network with 1 billion users, Facebook became the first U.S. company to debut on stock
markets
with a value of more than $100 billion. Its value subsequently plunged
by more than 50 percent on mounting concerns about slowing revenue
growth and the challenges of making
money as users shift from personal computers to mobile devices.
Facebook surprised
Wall Street
in the third quarter by announcing that mobile ads accounted for 14
percent of its total ad revenue. Some analysts expect the company to
report further growth in its nascent mobile ad business for the fourth
quarter.
Zuckerberg, who founded
Facebook in his Harvard dorm room, has said that mobile is the "most
misunderstood aspect" of Facebook. But he has repeatedly poured cold
water on rumors that Facebook would build its own smartphone to compete
against Apple Inc's iPhone and smartphones based on Google Inc's Android
operating system.
During an
on-stage interview at a conference in September, Zuckerberg said that he
believed search could be a ripe area of growth for Facebook.
"Facebook
is really uniquely positioned to answer a lot of the questions that
people have," Zuckerberg said, such as finding a good restaurant or
learning more about a job opportunity.
Still,
many technology observers believe that Facebook is more likely to
improve the search capabilities within Facebook than to develop a
full-fledged search engine that indexes all the Web's content and
competes head-on with search leader Google.
Among
the other items that technology blogs and analysts speculate might be
unveiled on Tuesday were new standalone apps for Apple's iPad tablet, new features to display video ads and even a new wing of corporate headquarters.
Some cautioned that expectations of a game-changing new product were likely to cause disappointment.
"There's
no way they're announcing anything that has financial impact, or they
wouldn't do it now, they'd wait two weeks," said Wedbush Securities
analyst Michael Pachter, citing Facebook's upcoming earnings