Facebook Rallies After Q3 Report and 4 Social Media Stocks Seeing Action
Facebook, Inc. (NASDAQ:FB) rallies after it released stronger than expected Q3 results last night, along with reporting that 14 percent of its ad revenue during the quarter were earned via mobile devices. Analysts at Citigroup and Stifel Nicolaus found this encouraging, and upgraded the social network’s stock. In a note released to investors earlier in the day, Citigroup analyst Mark Mahaney increased his rating to Buy from Neutral on the stock. Mahaney views that the risks regarding the company’s ability to monetize mobile traffic as being lower due to the company’s results. He also noted that the growth of the company’s ad revenues accelerated although the mobile ads was a big contributor. The analyst believes that the stock’s valuation is reasonable, but he reduced his price target to $30 from $35 on the stock. Furthermore, Stifel Nicolaus analyst Jordan Rohan upgraded the stock to Buy from Hold due to the boost in mobile revenue to $153 million during Q3 from about $20 million during the previous quarter. Rohan believes that the company’s growth will extend into 2013, and he gives the stock a $26 target. During mid-morning trading, Facebook saw a huge boost of $4.27, or 21.90 percent, to $23.77.
LinkedIn Corporation (NYSE:LNKD) revealed major updates to LinkedIn profiles last week, by giving them a style more similar to Facebook. It will now makeover its BlackBerry app, which currently only has a two star rating on BlackBerry App World, with speed improvements and a much needed update to boost functionality. Additionally, LinkedIn confirmed to TechCrunch that it intends to launch a BlackBerry 10 app next year.
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Groupon, Inc. (NASDAQ:GRPN) shares shed nearly 5.9 percent so far in October, and they have also underperformed the broader S&P 500 Index (SPX) by about 35 percentage points in the past three months. It appears as if some options traders have decided to bet on limited downside for the online coupon concern. Yesterday, GRPN saw nearly 51,000 puts change hands, nine times its normal single-session put volume. Almost all of the action around the out-of-the-money November 4 put, saw over 40,100 contracts traded prior to the closing bell. The puts crossed the tape at the bid price of $0.20, and put open interest at the front-month strike saw an overnight surge, pointing to sell-to-open activity.
Pandora Media, Inc. (NYSE:P) saw a bigger increase than it has in over a month as the idea of competition from Apple Inc. receded after Apple revealed its no music product at its iPad Mini event Tuesday. Pandora of Oakland saw an 8.35 percent rise to close at $9.86. Pandora saw the biggest gain in the Russell 1000 index. “This is likely a relief rally for Pandora shares,” said James Marsh, an analyst at Piper Jaffray. “The most likely timing would be at the next iPod event, probably 10 months from now. So Pandora shares likely have some reprieve from Apple’s threat, at least in the short term.”
Zynga, Inc. (NASDAQ:ZNGA) laid off 5 percent of its full-time workforce along with shutting its Boston office on Tuesday as part of its cost-cutting campaign, potentially leading to the “FarmVille” game maker’s close of its Japanese and British studios also. The company is attempting to arrest a steep drop in earnings while users gradually migrate to mobile devices or rival games, and it plans to “sunset” 13 unspecified older titles, Chief Executive Mark Pincus wrote in a staff memo on Tuesday, published on the company blog.
Investing Insights: Facebook Earnings: Fuels Profits, Stock Pops 15%.