Facebook stock tops IPO price - briefly

NEW YORK - Facebook has found stock-market redemption.

On Wednesday, the share price of the world's most populous social network briefly crept past $38 for the first time since its rocky public debut. In doing so, Facebook Inc. cleared a symbolic hurdle that had eluded it for more than a year.

The company's ill-fated first trading day on May 18, 2012, was marred by technological glitches on the Nasdaq exchange. The stock closed that day with a disappointing 23-cent gain. And its performance didn't improve, dipping to $17.55 in September.

"I think Facebook in general, and Zuckerberg in particular, felt that they let everybody down," Wedbush analyst Michael Pachter said of Facebook's 29-year-old founder and CEO, Mark Zuckerberg. "And by everybody, I mean all their employees who had stock, all their early private investors who had stock."

On Wednesday, the stock traded as high as $38.31 before closing at $36.80, a price that places the company's value at about $89 billion.

When Facebook's stock was trading around $24 in June, Zuckerberg said at the company's first shareholder meeting, "We understand that a lot of people are disappointed in the performance of the stock, and we really are too." He also said the company took its responsibility to shareholders "very seriously."

But he stressed that Facebook has always focused on building its long-term value - its user base, its advertising business, the apps that connect to it, its online network. In other words, build it and the value will come.

At the moment, investors agree. Facebook has been on a roll since reporting stronger-than-expected earnings last week. The company posted the largest revenue gain it has seen since late 2011, when it was still a private company. Its stock price is up 39 percent since it reported quarterly results on July 24.

In comparison, the Standard & Poor's 500 index has gained less than 1 percent in that time.

Investors are especially upbeat about Facebook's fast-growing mobile-advertising revenue, which went from zero at the start of 2012 to $656 million, or 41 percent of total ad revenue, in the April-June quarter this year.

Research firm eMarketer expects Facebook to increase its mobile-advertising revenue more than fourfold to over $2 billion this year - a 13 percent share of the global mobile-ad market, up from about 5 percent last year.