Today: Facebook hopes reassuring announcements will help end its stock slide. Plus: Nokia unveils new phones, but can it succeed in the wake of Apple's (AAPL) new iPhone? Also: Good day all around for social media stocks.
Facebook shares bounce back
After a months-long freefall, Facebook shares rebounded strongly Wednesday, giving investors hope that the worst may be over.
A day after closing at a new all-time low of $17.73, Menlo Park-based Faceboook surged 4.8 percent, or 85 cents Wednesday, to close at $18.58. The upswing is being credited to two announcements late Tuesday: A pledge that co-founder and CEO Mark Zuckerberg would not sell any of his shares in the next year, and that the company would not sell more stock to pay its tax bill. While the Zuckerberg news grabbed all the headlines, it didn't come as much of a surprise, as Zuckerberg has said from the beginning that he's in it for the long haul and isn't particularly concerned about his short-term financial gains. In fact, it appears it's Facebook's method of paying its taxes that is easing investors' concerns.
At the time of its IPO in May, the world's largest
Other analysts agreed, saying the move should help reassure nervous investors. "The whole problem with the stock has been with the lockups coming up," Susquehanna International Group analyst Herman Leung told Bloomberg News. "Using their own cash instead of issuing more shares, what it sounds like to me is that they don't want to further dilute existing shareholders," Leung said to the Wall Street Journal.
Nokia's new phone may get lost in iPhone's shadow
Nokia introduced its new line of Windows smartphones Wednesday, but it may be too little, too late to save the struggling company.
The Finnish mobile phone maker, which saw its once-dominant market share disintegrate with the release of Apple's iPhone in 2007, is essentially placing its future in the success of its new line of Lumia phones. Those devices will run on Windows Phone 8, a new operating system that fellow fallen tech titan Microsoft hopes can regain market share from Apple and Google's (GOOG) Android system.
On Wednesday, Nokia unveiled the impressive-looking Lumia 820 and 920 models, which feature an innovative high-res camera, wireless recharging capabilities and an ultra-bright screen that drew raves from reviewers. But enthusiasm waned after Nokia said the devices would only be available in "select" but unspecified markets, and gave no price or release date, other than the fourth quarter of 2012. The lack of those critical details sent Nokia shares in a tailspin, with disappointed investors sending its stock down almost 16 percent for the day, closing at $2.38.
Lacking specificity is not Nokia's only problem, as Apple's upcoming iPhone release threatens to completely overshadow the Lumia. Apple is expected to unveil the so-called iPhone 5 next week, and that device will likely hit store shelves about a week later (Sept. 21 is the rumored date). Though the Lumia will be out in time for the traditional Christmas gadget-buying season, it will do so at a distinct disadvantage, following in the iPhone's sure-to-be massive wake. Apple could sell as many as 10 million new iPhones in its first week alone, Piper Jaffray analyst Gene Munster predicts, according to a CNet report. In comparison, Nokia sold just 4 million of its previous Lumia iterations in the entire second quarter of 2012.
In fact, a new report by Topeka Capital Markets said a post-iPhone launch would be the worst possible time for any smartphone to debut. "We believe Nokia, Motorola and HTC will regret launching important new smartphones at the same time as the world's most anticipated consumer electronics launch ever, the iPhone 5," Topeka analyst Brian White said in a note, according to Apple Insider. Motorola unveiled its new line of Razr phones Wednesday, and HTC is set to announce a new device Sept. 19.
Good day all around for social media stocks
Facebook wasn't the only Silicon Valley company smiling after the markets closed Wednesday.
San Francisco-based Zynga, a Facebook partner, ended the day up more than 3 percent, ot 9 cents, closing at 2.92, as the online game company tries to reverse an extended stock slide following disappointing quarterly earnings in July, as well as the departures of several high-profile executives in recent months. Zynga got a boost Wednesday by the release of "FarmVille 2," the sequel to its hugely popular game that, at its peak, grabbed 32 million daily active users, according to NBC News. The game has been revamped in an effort to regain players who grew tired of the first version. "This is a complete re-imagining of the franchise," Zynga vice president of design Wright Bagwell told the Los Angeles Times.
Things have been better for LinkedIn, one of the top IPO success stories of the past year. The Mountain View-based workplace social network surged 5.5 percent Wednesday, or, $5.91, to close at $113.28 after being upgraded to a "buy" rating Tuesday by equity analysts at the Jefferies Group, who touted LinkeIn's growth potential.
Meanwhile, San Francisco-based review site Yelp continued its September resurgence, rising 6.27 percent, or $1.52, to close at $25.77 after CEO Jeremy Stoppleman announced mobile web traffic was outperforming desktop traffic, with 25 percent of users logging in from their mobile devices. Yelp's business model also got a boost from a UC Berkeley report that found positive reviews on the site can indeed boost restaurants' business. The study found that just a half-star increase in a neighborhood eatery's Yelp review made it almost 20 percent more likely to be full at peak hours, according to the San Francisco Business Times.
Silicon Valley tech stocks
The tech-heavy Nasdaq composite index: Down 5.79, or 0.19 percent, to 3,069.27.
The blue chip Dow Jones industrial average: Up 11.54, or 0.09 percent, to 13,047.48.
And the widely watched Standard & Poor's 500 index: Down 1.50, or 0.11 percent, to 1,403.44.
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Follow Mike Murphy on Twitter at twitter.com/mmmmurf.