Facebook (FB) Finally Above IPO Price; ETFs That Have Endured The Ride

by on August 8, 2013 | ETFs Mentioned:

The Facebook IPO on May 18th, 2012 was chaotic, to say the least. Between the Nasdaq failing to control the flood of trades that came in at the opening bell and the initial over pricing of the IPO itself, the mess of that day set a poor tone for the social networking firm’s future as a public company. A year later, the Nasdaq has been fined by the SEC for its poor handling of the situation and Facebook has pulled itself out of a hole. With the company’s share price breaking the $36 IPO ceiling, investors are looking for ways to invest in this recovering stock [see also How To Take Profits And Cut Losses When Trading ETFs].

A Long Road Since IPO

Facebook IPOFacebook is just one of just six large tech firms that watched its stock prices plummet after the first few days of trading. As seen below, the social media giant has spent the last year floating in the $20 region rather than $30 region, picking up a bit at the beginning of 2013; however, after Facebook announced earnings in the end of July, the stock has made a full recovery from the first year slump is currently above IPO [for more ETF analysis, make sure to sign up for our free ETF newsletter].

While this outstanding earnings season and recovery has built a renewed sense of investor euphoria around the firm, the bigger challenge Facebook now faces is keeping the price up. This impressive recovery will mean very little in the long run if the company’s earnings results were a one-time phenomenon.

FB - Stock Price Chart for Facebook Inc

Click To Enlarge


ETFs With A Stake In Facebook

Below we check out three ETFs that have everything to gain from Facebook’s market recovery and continuing health [check out 3 Economic Charts Bears Love To Ignore]:

  • Social Media Index ETF  (SOCL, C): As the premiere social media ETF, this fund has jumped into the growing business of networking, file sharing, and other web-based applications. With less than 30 total holdings, Facebook makes up 9% of the fund along with SINA Corporation and LinkedIn.
  • NASDAQ Internet Portfolio  (PNQI, B-): By tracking the performance of the largest and most liquid U.S. internet-related companies, PNQI has seen a 160% return since starting up in 2008. Besides a large stake in Facebook, the ETF also holds major players like Google, Amazon and eBay [check out the 8% Yield ETFdb Portfolio].
  • IPOX-100 Index Fund (FPX, C): One of the best returning ETFs during the earnings season, FPX is a modified value-weighted fund built to measure the performance of the top 100 companies by market cap in the IPOX Global Composite Index; Facebook makes up 7% of the total holdings.

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Disclosure: No positions at time of writing.