The Lead: Yahoo tops $30 for first time since 2008, another record for Facebook
A day after their respective CEOs took the stage in San Francisco and lamented the NSA's spying techniques, Yahoo and Facebook hit new highs on Wall Street amid optimism for the Silicon Valley stalwarts.
Yahoo's share price moved higher than $30 for the first time since Microsoft was bidding to purchase the Sunnyvale Internet giant for up to $33 a share in 2008, with the stock selling for as much as $30.27 before closing with a 1.6 percent gain at $29.65. At the time, co-founder and then-CEO Jerry Yang said Yahoo would eventually be worth more than Microsoft's asking price, but the share price has taken more than 5 years to near its 2008 levels.
Yahoo shares have nearly doubled in the past year, however, as investors and analysts have showed more belief in its current leader, former Google (GOOG) executive Marissa Mayer, and banked on the firm's Asian investments including Chinese Web giant Alibaba, which could go public soon at a valuation topping $100 billion.
In her speech Wednesday at the TechCrunch Disrupt Conference in San Francisco, Mayer touted that Yahoo's traffic has increased 20 percent since she took over the company, with monthly active users passing 800 million. That figure does not include the users Yahoo picked up from its $1.1 billion purchase of blogging platform Tumblr, part of Mayer's near-obsessive acquisition spree targeted at mobile startups, with results showing up in revamped mobile apps and a new video offering introduced this week.
Still, Mayer believes that Yahoo's turnaround has a much longer road ahead of it, saying Wednesday that "It's going to take multiple years" for Yahoo to move "in the direction and grow at the rate we want."
Facebook's growth rate has already been lauded as phenomenal, with the Menlo Park social network attracting more than 1 billion users and showing strong advances in mobile revenues during the past year. Belief in the company's model helped spur the stock to top $45 for the first time Wednesday and shares hit another new all-time high of $45.62 Thursday after J.P. Morgan suggested the stock could top $50 by the end of next year.
J.P. Morgan analyst Doug Anmuth issued a note saying Facebook would continue to develop its mobile revenues, projecting that ad sales targeting users on smartphones and tablets will be a majority of Facebook's total revenues by the fourth quarter of this year and hit 60 percent next year. As a result, the analyst boosted his price target on Facebook stock to $53, 20 percent higher than his previous estimate.
"We remain positive on Facebook shares as user engagement remains strong, with mobile more than offsetting desktop declines," Anmuth wrote.
Facebook stock closed with a 0.6 percent decline at $44.75 Thursday, but has gained 68.8 percent since its most recent earnings report as investors and analysts have praised the company's mobile efforts. Those gains may have been a factor in the timing of rival Twitter's confidential filing for its initial public offering, which the San Francisco company announced Thursday afternoon.
SV150 market report: Apple and Pandora gain, but HP and Netflix head the other way
Wall Street had its first down day in more than a week Thursday, with the Standard & Poor's 500 breaking a seven-session winning streak with a slight decline. Silicon Valley tech stocks had a slightly better day, though the SV150 also dipped despite a bounceback day for Apple.
Apple stock dropped like a stone after the Cupertino tech giant announced two new iPhone models at a Tuesday event at its corporate headquarters, with the biggest decline occurring Wednesday, after a similar launch event in China that investors hoped would include a deal with China Mobile, but instead just left Chinese consumers unimpressed. After a two-day decline of 7.6 percent, however, Apple recovered with a 1.1 percent gain to $472.69 after Walmart announced that it would sell iPhones for less than CEO Tim Cook announced at Tuesday's event, and a report suggested that Apple will announce new TV innovations next month.
Apple's gains could not lift the SV150, though, as other area tech giants slumped. After its largest American rival, Dell, finally received approval from shareholders to exit the public markets, Hewlett-Packard (HPQ) dropped 1.4 percent to $21.96; an HP spokesman told Marketwatch that Dell "faces an extended period of uncertainty and transition that will not be good for its customers." After hitting all-time highs two days in a row, Netflix dropped 2.2 percent to $301.41 after two Wall Street analysts downgraded the Los Gatos company, saying that it had reached its full value with its strong performance. Intel (INTC) fell 0.8 percent to $22.63 and announced it was closing a plant in Massachusetts that will result in 700 layoffs, and Cisco (CSCO) dropped 0.4 percent to $24.29 as the San Jose networking company showed off a new chip design. Google is growing, but its stock price did not Thursday; the Mountain View Internet giant confirmed a lease on property in Sunnyvale that could eventually house 1,000 employees, but shares fell 0.4 percent to $893.06.
Avoiding those doldrums, Pandora Media and Extreme Networks experienced large gains Thursday. Pandora's winning streak stretched to six straight sessions with a 12.1 percent gain to $23.97 after the Oakland company announced that Brian McAndrews would be its new CEO as the streaming-radio firm fights to avoid higher royalty payments. San Jose's Extreme rose 7.4 percent to $4.33 after announcing the planned $180 million acquisition of hardware company Enterasys.
Up: Pandora, Yahoo, Apple, Tesla, Zynga, SolarCity, NetApp, Gilead
The SV150 index of Silicon Valley's largest tech companies: Down 1.31, or 0.1 percent, to 1,321.49
The tech-heavy Nasdaq composite index: Down 9.04, or 0.24 percent, to 3,715.97
The blue chip Dow Jones industrial average: Down 25.96, or 0.17 percent, to 15,300.64
And the widely watched Standard & Poor's 500 index: Down 5.71, or 0.34 percent, to 1,683.42
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. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.