[SAN FRANCISCO] It's another first for Facebook Inc's stock: a third digit.
Already the fastest company ever to reach US$250 billion in market value, the social network operator has jumped over US$100 a share, capping a 476 per cent rally since September 2012 for the third-best performance in the Standard & Poor's 500 Index.
"The big seminal event for Facebook was showing they could make significant money and turn themselves into a well-run company," Tim Ghriskey, who helps oversee US$1.5 billion as managing director and chief investment officer at Solaris Asset Management, said by phone. The firm owns Facebook shares. "They've seen strong growth in advertising spending and viewership." Facebook climbed 2.5 per cent to US$102.19 at 4 pm in New York. It breached the US$100 level on a day when technology stocks surged the most since Aug 26, as Microsoft Corp, Google parent Alphabet Inc and Amazon.com Inc added more than US$80 billion in combined market value after quarterly profit topped estimates.
This isn't Facebook's first flirtation with the US$100 level. On July 21, the stock came within 1.7 per cent of breaking it. It then became mired in the August stock market selloff, dropping 14 per cent over three days to a two-month low. Since then it's shown resilience, rallying back 24 per cent.
Facebook joins 109 other members of the benchmark index in the three-digit club amid speculation that the company will continue to increase mobile-advertising sales on its application and others. Its ascent comes at a time when stock splits are increasingly rare in an American stock market that is dominated by institutional investors and exchange-traded funds that don't care about the absolute price of a share.
As Facebook's stock has increased, so has the net wealth of its founder and chief executive officer, Mark Zuckerberg. His fortune has risen US$9.1 billion in 2015, the second-biggest increase for US billionaires behind Amazon founder Jeff Bezos, according to the Bloomberg Billionaires Index. Mr Zuckerberg is the the world's eighth-richest person with US$43.6 billion.
Along with Apple Inc, Microsoft, Amazon and Google, Facebook is one of a quintet of technology giants that together make up almost 10 per cent of the S&P 500 and more than a third of the Nasdaq 100. It's the world's seventh largest company, surpassing old economy stalwarts such as JPMorgan Chase & Co. and Johnson & Johnson.
Technology stocks have been by far the biggest contributors to S&P 500's recovery from a 10-month low, rising 18 per cent since the market bottomed on Aug 25.
"Facebook has really established itself as a force," Mr Ghriskey said. "Reaching this level is a testament to the job management has done and the dominant product it is."