Facebook went public in May 2012, starting its first day of trading on a messy note. However, as trading took off, more than 80 million shares changed hands in the first thirty seconds and the day ended with Facebook’s stock price rising 0.6% from its IPO price of $38.
The company didn’t have it easy when it made its debut on the NASDAQ, however, the company soon showed potential to register strong revenues and earnings growth, and investors responded by sending its stock price upwards. Facebook’s stock price has soared more than 75% ever since its IPO in 2012.
Facebook’s revenues, having increased at a three year CAGR of 58.7% now stand at $7.8 billion. The company generates a bulk of its revenues (90%) from advertisement, while the remaining 10% come in from virtual payments and other sources.
Facebook’s earnings depend upon the company’s ability to monetize its 1.2 billion user base through different advertisement products.
In a recent Facebook news, the company acquired Whatsapp, the popular messaging app for $19 billion. The word on the street is that the guys in blue suits over at Facebook are now eyeing atmospheric satellite maker Titan Aerospace, and have made of $60 million for the acquisition.
The company has also introduced 15-second video ads for advertisers, and is expected to charge prices almost as high as $2 million for these ads, thereby adding yet another revenue generating stream to the company’s profit and loss statements.
Facebook’s stock price has soared more than 150% in the last twelve months and is expected to rise even further as the company continues to deliver higher earnings.