Shares of Facebook Inc(NASDAQ:FB) gapped up 23% to $23.99 after hitting a high of $24.25, very close to its 200-Day Moving Average of $24.66.
Investors seems to be impressed with the company’s third quarter earnings, which came in ahead of analysts’ target. The key driver during the quarter was the company’s strong performance from mobile ad revenue, which has shown a solid jump, giving a solid answer to those were criticizing the company’s potential from this space given a sudden spike up in mobile users.
The company generated about $150 million from Mobile ad revenues, well above from an estimated $40 million to $50 million in the second quarter and almost nothing in the first.
Ever since the company debut on the Wall Street, Mobile advertising has been key the concerns among investors and analysts community, which has eroded almost half of its market cap in first 2 months.
On the other hand, Advertising revenue jumped 36% sequentially to $1.09 billion, up from 28 percent growth in the second quarter. But revenue from its payments and other businesses boosted by just 13% to $176 million.
There is more good news for Facebook shareholder, this morning analyst at Citi Research upgraded the shares to buy, praising the social network's quarterly report from a day earlier. "What investors have for the first time since the FB IPO is fundamentals acceleration with a reasonable valuation," analyst Mark Mahaney wrote in a note to clients. Facebook on Tuesday reported a surge in advertising revenue as well as an increase in mobile monthly active users.