Facebook IPO Fuels Interest in Social Media Stocks
When Facebook filed initial paperwork for its long-anticipated IPO on Wednesday, enthusiasm for other social media stocks responded with strong gains, particularly those affiliated with the world's top social media company. Zynga, for example, saw its shares gain 30 percent since last Friday, when the Wall Street Journal was the first to report on Facebook's impending IPO filing. After Facebook filed late Wednesday, Zynga's stock responded by rising nearly 17 percent on Thursday alone.
And it's not only Facebook-related stocks that got a boost from the filing, as other Internet stocks such as Groupon and LinkedIn surged Thursday, as well. The excitement spread throughout the social media sector, as trading volume skyrocketed on the Global X Social Media ETF, a gauge of the biggest publicly-traded social media firms. Trading on the Social X averaged about 6,000 shares traded per day last week, but surged to over 120,000 shares per day on Wednesday and Thursday, driving the ETF's value up more than 10 percent.
In addition, the fund's assets more than doubled in value on Wednesday from $1.4 million to nearly $3 million. A spokesman for Global X expects this explosive trading growth to continue, as well. The company launched the ETF in November, and has so far been disappointed in the interest it has drawn. But with Facebook going public, the firm expects microblogging site Twitter to follow suit later this year, bringing social media's two biggest names onto the public market and on the ETF.