Facebook(FB) Stock soared more than 30% on 25th July 2013 after announcing Q2 results which were far ahead of street estimates. Many were short on the stock ahead of earnings as analysts were expecting weak set of numbers from the social media giant.
Contrary to that Facebook surprised street by delivering better than expected performance on all parameters. Short Squeeze coupled with fresh interest in the counter led to a massive rally in the stock which added more than $20 billion to it's market value.
The stock made fresh 52 week high at $35 and is very close to it's IPO price. In May 2012 Facebook came out with an IPO at $38 per share valuing the company at over $100 billion. Soon after IPO the stock came down substantially due to several reasons and touched a low of $17.5, a fall of 54% from the IPO price.
After announcement of second quarter result the confidence of investors seems to be returning back in the company it appears that the stock will move past it's IPO price in few weeks. Long term investors must avoid the stock as the valuation of stock is way beyond the comfort zone and could crash if stock fails to showcase similar performance in subsequent quarters.
FB touched it's IPO price of $38, momentum is what drives market not value, what say?
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