Facebook All But Kisses Its IPO Price After Investors Embrace Its New Mobile Gaming Push

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Fourteen months later, Facebook today came within a kiss of its $38 IPO price, spiking to as high as $37.66 before easing slightly. It was the highest peak for Facebook since its first week as a public company.

Facebook hit a rough stock price trough alongside the stumbling launch of both Facebook Home and the HTC First. But now Facebook has found its momentum again. Following a simply stellar second-quarter earnings report, Facebook today announced a new mobile gaming push that will help small and medium scale game publishers “take their mobile games global.”

Facebook will pick up a cut of the revenues from those titles. The effort, if successful, could give the company a way to continue growing its revenue and, more specifically, the slice of its top line that doesn’t come from advertising — diversifying its larger business. One source in the gaming industry told us Facebook could eventually make a significant portion of its total revenue from game publishing.

The new effort’s focus on mobile isn’t to be dismissed as incidental: Facebook is working to grow the mobile side of its business as quickly as possible, essentially chasing a market shift toward mobile usage of social properties and services that has caught some companies, Zynga most especially, in the crosswind.

Facebook, currently trading at $36.89, is up around 4 percent on the day.

Reaching its IPO price would be a psychological victory for Facebook, and vindication for its investors and bankers that took it public at that price; Facebook had what was at the time the third-largest IPO in American history. The rapid deterioration of its stock price that followed left many poorer, fuming, and looking to sue. However, a return to form would erase some of those complaints, though will do little to assuage those who were caught in the crossfire of its first-day technical trading woes.

What a rising stock price could help with are hiring and employee retention. Facebook needs to be competitive in both, perhaps even more now, especially given the rising profile of Yahoo. Hiring in the Bay Area remains blood sport.

This last year it’s seen a seemingly constant exodus of critical veteran employees in product ads and design. While many likely felt they’d done their duty and were ready for a new challenge, the ailing stock price surely didn’t persuade them to stay. A climbing stock price could convince young guns that there’s still a big financial upside to working at Facebook, along with the potential to build products that impact more than 1 billion people.

A final thought, and one that I’ve made before in some form: Facebook is currently a far stronger company than its former self that went public in terms of usership, revenue and so forth. And the market is still not quite comfortable valuing it at the price it initially bore at its IPO. That indicates that we as a market have become more conservative in the past year. Or perhaps simply more sensible.

Top Image Credit: Emmanuel Huybrechts Additional reporting by Josh Constine