What a long, strange trip it's been for investors in Facebook. From the hype ahead of the IPO to the fear that it was all a fad to today when the shares have finally come all the way back to where it all started at $38 a share.
Who could forget that image 14 months ago of Facebook founder and CEO Mark Zuckerberg ringing the opening buzzer alongside NASDAQ CEO Robert Greifeld. Zuckerberg wearing his corporate uniform -- the hoodie -- and the NASDAQ CEO sporting a mock turtleneck underneath a T-shirt.
It was supposed to be the kickoff to a stock frenzy, and shares were supposed to soar to the heavens right out of the gate, but instead all heck broke loose. Trading on the first day was a mess, and in the months that followed investors found countless reasons to not "like" Facebook as a stock. By last September, the company's share price had been cut in half, trading below $18 a share. It looked as if Facebook and the entire social media space was going to be just another cautionary tale for investors.
But then Facebook proved it could make money, lots of money, especially in the area Wall Street covets right now - mobile. And last week, when Facebook reported its second-quarter earnings, one of the first things Zuckerberg highlighted was, you guessed it, mobile, saying, "We've made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile ..."
Facebook book shares have been on a tear since last week's earnings announcement. The stock was up 44 percent in the past six trading sessions. And since it bottomed out last September, shares have more than doubled.
Facebook stock closed down 2.2 percent to $36.80 on Wednesday. Shares are still up 48 percent for the month of July.
The highlights from Facebook's latest results make it easy to understand why Wall Street has decided to – here comes the expected pun – "like" the stock again.
• Daily active users (DAUs) were 699 million on average for June 2013, an increase of 27 percent year-over-year.
• Monthly active users (MAUs) were 1.15 billion as of June 30, 2013, an increase of 21 percent year-over-year.
• Mobile Monthly active users (MAUs) were 819 million as of June 30, 2013, an increase of 51 percent year-over-year.
Facebook also added that it now has more than 1 million active advertisers on the site.
So for the patient investor and the faithful fans of Facebook, this is a good day. A day to say, "I told you so." A day to believe that this is the start of a surge that will bring it big profits in the weeks and months to come.
But it's also a day to remember that while Facebook has recovered, there have been lots of social media stocks that have crushed investors' dreams. The two most recent ones that come to mind are Groupon, which is down 50 percent since its IPO, and Zynga, down almost 69 percent since it went public.