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Facebook value tops $100bn as Zuckerberg gets it right

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By Noel Young, Correspondent

August 27, 2013 | 2 min read

Facebook’s market value passed $100bn yesterday as hopes grew that the social network can bolster sales from mobile advertising.

Mark Zuckerberg

The stock was up 1.9 percent to $41.34 at the close in New York. Earlier, it touched $41.94, the highest since Facebook’s first trading day on May 18, 2012.

The shares are up 55 percent this year, compared with a 16 percent gain in the Standard & Poor’s 500 Index, said Bloomberg.

Concern about Facebook’s ability to sell more ads for wireless devices brought the the shares down after its $16bn IPO, which was the largest technology offering ever.

Facebook was in the dumps at $17.73 in September, but CEO Mark Zuckerberg is making progress in mobile. Facebook last month said promotions on smartphones and tablets generated 41 percent of quarterly advertising revenue, helped by new marketing tools.

“The market is gaining confidence that Facebook is going to be a viable profit-generating machine in the future,” said Laurence Balter, an analyst at Oracle Investment Research. “People are checking their Facebook page more and more all the time.”

Facebook shares are now trading at about 180 times earnings: greater than all except three companies in the S&P 500, according to data compiled by Bloomberg. A higher multiple can signal that investors think the company may report stronger profit growth in the future.

At a market valuation of $100.7bn, Facebook joins technology companies worth more than $100bn including online retailer Amazon.com, the most valuable US company at more than $450bn and Google with a market capitalisation of about $289bn.

Facebook stock is approaching its all-time high of $45, an intraday record it set on the day of its trading debut

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