Wednesday, March 5, 2014

Facebook up as Stifel hikes price to $82

SAN FRANCISCO (MarketWatch) — Shares of Facebook Inc. rallied Wednesday after Stifel raised its price target for the stock, citing "broad acceptance" of the social network's platform by advertisers.

Facebook (FB)  was up 4% to close at $71.57 after Stifel analyst Jordan Rohan raised his price target to $82 from $72, arguing that the Menlo Park, Calif.-based company "continues to gain share of overall marketing spend."

"Our recent channel checks suggest that marketers view Facebook as a strategic communications platform, capable of establishing and reinforcing relationships with consumers," Rohan told clients in a note.

After proving in 2013 that its ads work, he added, "Facebook now stands to receive a significantly higher proportion of clients' marketing budgets, particularly from sophisticated marketers who have committed resources to track the efficacy of Facebook spend."

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However, Rohan echoed worries about Facebook's $19 billion acquisition of WhatsApp, which he says makes strategic sense, but "the valuation is still perplexing."

"However, Facebook's core business fundamentals are so strong that investors are likely to give the company leeway to take bigger risks, even at extended valuations," he added.

Other social media stocks posted gains. LinkedIn (LNKD)  was up 2.3% to close at $207.74, while Zynga Inc. (ZNGA)  gained nearly 1% to close at $5.69 and Twitter (TWTR)  was up a fraction to close at $54.38.

Shares of eBay (EBAY)  slipped a fraction to close at $58.86. Investor Carl Icahn again blasted the company's board, saying in an interview with CNBC that he has "never seen worse corporate governance than eBay."

Microsoft (MSFT)  shed 0.8% to close at $38.11, while Groupon Inc. (GRPN)  slipped 1.3% to close at $8.57.

The Nasdaq Composite Index (COMP)  gained 6 points, or 0.1%, to close at 4,358. The Morgan Stanley High Tech 35 Index (MSH)  and the Philadelphia Semiconductor Index (SOX)  were each up a fraction.

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