Facebook 'Friended' by Nasdaq, to Join Nasdaq 100 (Update 1)
Updated from 8:21 a.m. EST to provide more context and comment from Nasdaq in the fourth and fifth paragraphs.
NEW YORK (TheStreet) -- Just seven months after making one of the largest IPO flubs of all time, Wall Street has finally "friended" Facebook (FB). The social networker is set to join the Nasdaq 100 later this month.
In a press release, Nasdaq OMX Group (NDAQ) announced the Menlo Park, Calif.-based Facebook will become a component of three indexes prior to the market opening on Dec. 12. Facebook will join the NASDAQ-100 Index, the NASDAQ-100 Equal Weighted Index, and the NASDAQ-100 Technology Sector Index. Facebook is set to replace Infosys (INFY) in the index.
Facebook, which has a current market cap of almost $30 billion, is the largest technology company not in the Nasdaq-100. The Nasdaq changed the requirements of joining the prestigious index, asking companies to be listed six months before a decision was made. It had previously been one year.
Facebook was the largest tech IPO of all time, raising more than $16 billion in May, but it seemingly went downhill from there. The IPO priced at $38, opened for trading at $42.05, and spent the first day struggling to stay above $38. There were several errors, including those by the Nasdaq, its brokers, and Facebook itself, as delays and overestimated demand hampered the share price. The stock has not seen $30 since mid-July, having reached a low of $17.55 in early September. But the social networker has enjoyed a recent strong run, gaining 54.89% over the past three months, as investors reassess the growth prospects of the company. Over the same time frame, the Nasdaq has lost 2.54%. Facebook's third-quarter earnings were a surprise to Wall Street, as the company beat estimates, helped by its strength in mobile advertising. Overall, Facebook posted adjusted earnings of 12 cents a share on revenue of $1.26 billion, slightly beating Wall Street estimates on the top and bottom line. Facebook declined to comment for this story. Shares were rising in premarket trading, up 1.93% to $27.99. Interested in more on Facebook? See TheStreet Ratings' report card for this stock. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Commodity_BullSelect the service that is right for you!
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