Facebook shares dropped 2 percent at noon after it reached over the $38 mark as it reclaimed its original value when the company launched its IPO 14 months ago. Earlier in the trading session, Facebook shares went up 2 percent at $38.28. But since then, it cooled off and fell to $36.76.
The rally came after the social networking giant’s quarterly earnings report that indicated an increase in monthly active mobile users. Facebook got quarterly profits of $333 million, which was up from a loss of 8 cents a share during the same period last year. Monthly active mobile users increased 51 percent.
Facebook’s IPO has disappointed investors who hoped that it would ignite a renaissance of Internet IPO. Shares of Facebook got a high of $45 at its first day of trading before it closed up 0.6 percent. From there, it dropped and lost almost half of its value. Last September, the shares dropped as low as $17.55.
In the last couple of days, Facebook stock moved up. It jumped more than 30 percent in a week as investors saw the improvement of the company in mobile and other areas as it released its quarterly results last week.
It was seen as a vote of confidence for Facebook when its shares broke above $38. Analysts saw it as a psychological barrier than anything else. For the executive team, the increase in the value of the stock is the validation by the market that the social network’s technology-driven platform improvements and its mobile pivot have paid off.
Facebook wants to get a larger mobile market share as it launched a new game publishing initiative. The plan would help promote smaller mobile titles and at the same time get more sales revenue. The company is also planning to sell TV-style commercials 15 second spots for $2.5 million.