What is Driving Facebook Stock?
The social media giant that is known in almost every national and sub national jurisdiction on the planet, Facebook, has been a wild company to follow for years and a top stock to buy since 2012. Although it suffered a slump immediately following the IPO in 2013, it is now trading at over double the IPO value, shutting down the initial short sellers. However, as an Internet stock, Facebook has never been able to escape looming fears of sudden crash and abandonment, like MySpace, Napster, and Friendster. But this uncertainty (an element that listed equities are absolutely allergic to) is not what is driving Facebook stock. What drives Facebook stock is what naturally drives a regular company: Potential, results, and consistency.
Although investors are not enthusiastic that Facebook has limited potential in the way of new users (Facebook’s user base would literally exceed the population of the planet if it grew over 6 times), There are many areas for Facebook optimism. Firstly, Facebook is finally making plans to initiate revenue tools on its massive asset, Instagram. With over 300 million users, the upside risk is incredibly large. Additionally, Facebook continues to acquire other smart companies, like Oculus. Virtual reality is a technology that has virtually unlimited growth potential, and is a component of every futuristic vision in the media (save for Zombie apocalypse futures).
Facebook’s results continue to amaze investors. Quarter over quarter, Facebook revenues increase 41% in the first 3 months of the year. Research and development expenditures grew at the exact same rate, an encouraging sign of things to come, and an encouraging sign of corporate youth.
Consistent growth and consistent developments make Facebook an attractive investment. They still have the same incredibly intelligent brains behind them that created and sustained Facebook, and turned it into one of the most admired and known companies around the world. It is hard to imagine such an environmental shock that shakes a substantial value out of Facebook. Even as an internet stock, Facebook commands incredible staying power, has done an incredible job at learning from its predecessors mistakes, and still does a great job at consistently staving off competition..