The social network giant had a horrid IPO initially but recouped
the damage soon by adding almost 100% this year. The market value
of FB has been rising by leaps and bounds over the last few months
and currently stands at about $141 billion.
The ongoing boom in the Internet space especially in developing
nations, significant software developments, and growing prospects
in online and mobile advertising business made FB a clear winner in
the recent past and the stock will likely continue to be on the
bulish trend in the coming days. Some market researchers estimate
that FB's share in the online ad market is likely see a jump in the
next two years.
If this was not enough, FB's recent addition to the S&P 500
index inspired optimism around the stock in the market. FB gained
about 5% on its first trading as an S&P 500 component. Some
experts believe that the addition to the S&P 500 index and the
consequent demand for it urged FB to extend its shares offering in
the secondary market (read:
Will Investors 'Like' these ETFs as Facebook Joins
New Stock Offering
Following an eventful IPO in late 2012, Facebook (
) is now gearing up for a secondary stock offering. The twist in
the tale is that a large piece of Facebook's secondary offering
announcement of 70 million Class A shares is owned by the Facebook
head Mark Zuckerberg (about 41 million).
Investors, if at all, doubtful over FB's future should note that
though the company's chief opted for a stake sale, Zuckerberg will
retain a sizable
voting right of outstanding capital stock, down from 65.2%. This
reduction will help him to meet his
and not have much impact on his control power. As per sources, the
latest offering is intended to fund working capital and other
general corporate purposes. In any case, FB has a Zacks Rank #2
FB has considerable exposure in funds like
Global X Social Media Index ETF
PowerShares NASDAQ Internet Portfolio
First Trust Dow Jones Internet Index (
. Following FB's official joining as an S&P component, the
funds covering FB inched up more than 1.2%. This conforms to the
overall bullishness in the social media space.
Thus, investors willing to capitalize on this recent uptrend and
stock offering by FB, might consider buying these products. The
trio has a top Zacks ETF Rank of '1 or 2' and could be interesting
picks to cash in on the social media boom.
SOCL in Focus
SOCL looks to track the Solactive Social Media Index which measures
the performance of companies involved in the social media industry.
In its 31-stock portfolio, the in-focus FB takes up the top spot
with 10.87% allocation. So far, the fund has generated an AUM of
The ETF charges 65 bps in fees a year. The fund returned 63% in YTD
frame ( as of December 23). SOCL has a Zacks ETF Rank of 2 or 'Buy'
rating with 'High' risk outlook (read:
Is the Social Media ETF Losing Its Luster?
PNQI in Focus
This ETF - tracking the Nasdaq Internet Index - invests about
$263.5 million of assets in 80 securities in the Internet segment
of the economy. FB takes up the first position here with 8.95% of
holdings. The fund surged a handsome 65% in the YTD time frame.
PNQI is a cheaper fund, charging 60% of expense ratio. PNQI has a
Zacks ETF Rank of 1 or 'Strong Buy' rating with 'High' risk
FDN in Focus
This ETF offers exposure to the Internet segment of the broad tech
sector by tracking the Dow Jones Internet Index. Among the three,
this is by far the largest fund. FDN invests about $1.9 billion of
assets in 41 securities in the Internet segment of the economy. The
stock under review - FB - holds the third position here with 6.63%
FDN added an impressive 54% in the YTD time frame. FDN is a more
low-cost option, charging 57% of expense ratio. FDN has a Zacks ETF
Rank of 1 or 'Strong Buy' rating with 'Medium' risk outlook (read:
Top Ranked Internet ETF in Focus: FDN
Facebook's earnings have surprised the market for the last three
quarters by wide margins. The stock's short-term moving averages
have outpaced long-term ones indicating a bullish trend ahead.
Amid such a backdrop, investors should 'Like' Facebook at least
for the near term.
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FACEBOOK INC-A (FB): Free Stock Analysis Report
FT-DJ INTRNT IX (FDN): ETF Research Reports
PWRSH-ND INTRNT (PNQI): ETF Research Reports
GLBL-X SOCL MDA (SOCL): ETF Research Reports
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