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Facebook Stock Rebound: UMD-Smith Expert Comments

Jul 31, 2013
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MEDIA ALERT: July 31, 2013
Attention: Finance Reporters

COLLEGE PARK, Md. - David Kass, Tyser Teaching Fellow in finance at the University of Maryland’s Robert H. Smith School of Business, comments on Facebook’s price per share rebounding to near its $38 IPO level (from May 2012) after trading as low as $17.55 last September.

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"The reason for this increase is a much better-than-expected earnings report. Revenues and profits were higher than analyst forecasts, especially for mobile users. Revenue increased 53 percent versus second quarter 2012, while operating profit increased 54 percent. Revenue from advertising ($1.6 billion) represented 88 percent of total revenue and a 61 percent increase from the same quarter last year. Mobile advertising revenue represented 41 percent of advertising revenue for second quarter 2013.

"If Facebook can continue to grow its advertising revenues rapidly, especially in the high growth mobile area, the outlook for its stock performance is very good. However, Facebook's price-earnings ratio, which exceeds 50:1, leaves little room for disappointment.”

Kass has held senior positions with the Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis. His teaching includes advanced financial management and business finance, and he has launched a Smith School “Warren Buffett” blog. He has appeared on Bloomberg TV, CNBC, PBS Nightly Business Report and others.

Phone/Email: 301-405-9683, dkass@rhsmith.umd.edu 
Bio: www.rhsmith.umd.edu/directory/david-kass
Twitter: twitter.com/DrDavidKass

 

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About the University of Maryland's Robert H. Smith School of Business 

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, MS in business, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.