Facebook 'Friended' by Nasdaq, to Join Nasdaq 100 (Update 1)
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
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