Facebook, by far the world’s biggest social network, reached a record high of 1.86 billion monthly active users in the last quarter. Facebook also owns Instagram (600 million active users) and WhatsApp (1.2 billion active users). Meanwhile, its stand-alone Messenger app has over 1 billion users.
In 2012, Facebook went public at an initial stock price of $38. However, just a few months after its IPO, investors started to worry that the company might be unable to handle growing mobile use, doubts which drove the share price down to its lowest-ever level of $18 per share. These concerns were ultimately proven unfounded.
Traders who bought significant equity at that price could have made large profits, considering that Facebook stock is now worth more than $140 per share. This is after gaining around 22% since the beginning of the year. With further price growth possible, many traders are continuing to invest in Facebook through online stock brokers such as UFX.
Social Media is a young industry that has evolved rapidly over the past decade, thanks to the increased use of mobile devices. Traders are optimistic about Facebook’s potential for further growth for various reasons:
1# Facebook is getting better at monetizing its platform
2# Facebook is now seen as one of the best mobile platforms
3# The company’s user base continues to grow steadily
4# Facebook dominates digital advertising through Google
Over the past two quarters, Facebook’s advertising business increased by about $1.6 billion, with almost 90% of that growth from Google advertising. An eMarketer study suggests that Instagram will also emerge as a key revenue source for Facebook, accounting for 20% of U.S. mobile revenue, up from 15% last year. Instagram is growing rapidly, and with similarly strong performance projected for Messenger, WhatsApp and Virtual Reality division Oculus, Facebook seems poised to maximize its revenue across the board, taking full advantage of changing customer habits.