Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Facebook Inc. (FB - Analyst Report) is making its first stock offering since its IPO in May 2012.The company has decided to sell 70 million shares amounting to a total value of $3.85 billion.

As per Facebook’s recent announcement, out of the 70 million shares, 27 million will be offered by the company itself, while 41.35 million will be offered by Mark Zuckerberg, the chief executive officer of the company.

Moreover, another board member Marc Andreessen will offer 1.65 million shares. The proceeds from the stock offering will be utilized for paying taxes incurred from exercising options.

The stock offering corresponds to the company’s inclusion in the Standard & Poor’s 500 Index, which is expected to create demand from index funds and other financial institutions planning to buy Facebook stock. We believe this is a good move by the company, as the share price continues to move upward.

The secondary offering reflects the growing popularity of consumer focused social-media providers in the U.S. The company is making every possible move to raise more funds, for business expansion. The company is taking up new projects and has ambitious expansion plans to move ahead in future, one of them being the company’s recent association with, Qualcomm (QCOM - Analyst Report)) and other technology companies, if successful, will aid the company.

It is aimed to connect nearly 5 billion people who do not have access to Internet. This combined with its massive user base and its ability to track personal details over time, make it a formidable force in the online ad market. So, we believe the funds raised will be used prudently.

Although Facebook is favorably placed, issues like other modes of advertisement and communication and increasing competition have affected other social media stocks like LinkedIn Corp. (LNKD - Analyst Report) and Yelp Inc. (YELP - Snapshot Report).

Facebook, currently, has a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%