By Benjamin Pimentel, MarketWatch
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 nearly 2% at $70.16 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."
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
1.6%, while Yelp Inc.(YELP) was ahead by 2% and Zynga Inc. (ZNGA)
gained 3%. Twitter (TWTR) was up a fraction.
Shares of eBay (EBAY) were up nearly 1%. 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."
On the downside, Microsoft (MSFT) shed 1%, while Groupon Inc.
(GRPN) slipped 1.2%.
The Nasdaq Composite Index (RIXF) gained 5 points, or 0.1%, to
4,357. The Morgan Stanley High Tech 35 Index (MSH) and the
Philadelphia Semiconductor Index (SOX) were each up a fraction.
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