Last week, we noted that Facebook’s stock appeared to have gotten a nice little bump after it announced its move into the sale of physical gifts, potentially opening a new revenue stream for the company. Not all of Facebook’s big news is so kind. Today’s announcement that Facebook has reached 1 billion users has had no impact, or possibly a negative one, on its stock so far today.
As of this moment, the stock is trading at 6 cents down on today’s opening price of 21.83, or down 0.27%. It did open a bit higher but has been trading at under $22 for the last couple of hours.
This morning’s news was followed by a short appearance on the Today Show on NBC, as well as an interview in Businessweek. These will be followed by a longer TV interview this evening, also on NBC. As a point of comparison, after speaking on stage at TC Disrupt, Facebook’s stock was up by more than 8.9%, and the Gifts news gave it a 6% lift.
So why the lukewarm response here? It could be that Facebook’s been close enough to 1 billion monthly active users leading up to today, that this didn’t have as big of an impact on the company as you would think.
There is also the fact that today’s news was largely about a single number, not so much about revealing strategy about how to get to the next billion, or how to make money out of the current billion already there.
For the record, when asked about the next billion by Businessweek, Zuckerberg’s reply was pretty simple (and no surprise for those who watch the company): “The big thing is obviously going to be mobile,” he said. Currently 600 million of Facebook’s 1 billion users are on mobile devices, and their rate is growing faster than that of desktop.
These are the big challenges that have been hammering Facebook’s stock price so far. The company speaking clearly about its ambitions, or actually acting on them — that’s the kind of news the market likes to hear.
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...