Next week, Facebook Inc. will join the NASDAQ-100 Index. Incidentally, the exchange operator has decided to shorten the waiting period for a company’s inclusion, thereby making it more attractive to the fund managers. Facebook, the largest social networking site in the world with more than 1 billion users is going to replace Infosys. Only 7 months ago, Facebook’s $16 billion worth IPO was held.
Facebook’s inclusion in the index is possibly going to attract new buyers. On May this year, Facebook shares were priced at $38 per share, however, prices decreased by around 53% later. Things took a better turn for Facebook though, as the 3rd quarter profits for the company increased by 32%; it surpassed the initial estimates as well. The advertising sales on mobile devices attributed to this profit rise mainly.
According to the analyst for Robert W. Baird & Co., Collin Sebastin, as Facebook is a part of NASDAQ now, the demands for its shares will increase as well. He added that the growth Facebook is showing in the mobile advertising arena is encouraging in itself and investors will be more interested in it. Today, the share prices of Facebook increased by 1% and are currently at $27.74 per share.
Incidentally, on 5th April, Facebook decided to enlist itself to NASDAQ. The exchange operator also cut short its 2 years wait duration (If the stock of the company is one of the top 25 stocks in the index considering market value, an exception could have been made though) as an enlisting criterion to 3 month time. The decision was disclosed on 23rd April, the same day Facebook decided to enlist itself at NASDAQ instead of New York Stock Exchange.
The founder of Ipox Schuster LLC, Josef Schuster, stated that the Facebook’s inclusion in NASDAQ-100 was kind of anticipated by the investors and hence, Facebook will only benefit on a limited basis. He added that probably till 12th December, Facebook will get support in form of systematic buying, but, after that, it may have to do away with the short-term gains. According to the figures released by NASDAQ, the total market capitalization of Facebook is around $30 billion and it has 1.1 billion Class A shares as outstanding. Incidentally, NASDAQ has 8 of the 10 biggest technology companies of US listed in it, such as: Intel, Microsoft, Google and Apple.