Join        Login             Stock Quote

Facebook (FB) Retreats Amid Acquisition Rumors

 May 29, 2012 01:04 PM

(By Balachander) Facebook Inc. (NASDAQ:FB) is rumored to be considering acquisitions of Norwegian browser maker Opera Software and facial recognition software developer Face.com, weeks after raising $16 billion from its initial public offering.

On Tuesday, shares retreated 7.77 percent to trade at $29.44, down 22.5 percent from its IPO price of $38.

The social networking giant is considering a $1 billion bid for Opera in an attempt to unveil its own browser as well as monetize its mobile offering, according to posts on several technology blogs.

Shares of the Norway-based Opera, which makes browsers for mobile phones, tablets, desktop computers and televisions, shot up nearly 26 percent in Oslo on Tuesday.

[Related -How To Earn 30% A Year From Microsoft -- Without Buying A Single Share]

Analysts are of the view that Opera would be such a perfect fit and sensible for Facebook on several levels, and that they reportedly estimate that the social networking site would have to pay a significant premium for the acquisition.

The move would allow Facebook to compete with Google Inc.'s (NASDAQ: GOOG) Chrome, Microsoft Corp.'s (NASDAQ:MSFT) Internet Explorer and also Yahoo Inc. (NASDAQ: YHOO), which recently launched the Axis browser.

[Related -Boost Your Dividend Yield]

Google already has extensive relationships with Opera, with the search engine giant being Opera's default search partner for Opera Mini and Opera Mobile.

California-based Facebook is yet to monetize its surging user base on tablets and smartphones and those are big roadblocks given the exponential rate of growth in mobile usage over personal computers for the foreseeable future.

The deal might enable Facebook to launch its own smartphone or expand its services that are now available on mobile phones.

Meanwhile, Opera, which claims to have more than 200 million Mobile and Mini subscribers, has been seeking to strengthen its revenue model, though the Opera Mobile and Opera Mini continue to remain the main sources of revenue for its business.

In March 2012, there were over 168.8 million Opera Mini users, a 5.5 percent rise from February 2012. Since March 2011, the number of unique users has increased more than 64 percent, according to its Website.

Facebook has been in spending spree of late, sitting on a big pile of cash. Late April, it agreed to buy 650 patents from Microsoft for $550 million in cash. The latest deal is the second-biggest in the history of Facebook after its deal to acquire photo-sharing app maker Instagram in a cash and stock deal worth $1 billion. Facebook also announced that it will launch an App center in a bid to bolster its presence in the mobile marketing.

Also, there have been speculations that Facebook might acquire Israeli startup Face.com at between $80 million and $100 million.

The widely-anticipated IPO of Facebook is in the news since it went public and that too for all wrong reasons. Since debuting on the Nasdaq on May 18, Facebook shares have been marred by several issues right from technical glitches to lofty valuations.



Post Comment -- Login is required to post message
Alert for new comments:
Your email:
Your Website:

rss feed

Latest Stories

article imageBogle Says Indexing Destined To Win The Battle Of The Quants

Vanguard founder John Bogle gave a powerful speech last month at the Q Group’s Spring Seminar that lays out read on...

article imageVMAX and VMIN Poised to Be Most Important VIX ETP Launch in Years

REX Shares is launching two new VIX exchange-traded products on Tuesday in what is likely to be the most read on...

article imageThe April 29 Gold Triangle Breakout Update

If you’re just watching stocks, you may be missing this powerful Triangle Breakout surge in read on...

article imageSell In May, But It Is A Presidential Election Year

With May just around the corner, articles covering the "Sell in May' phenomenon are not in short supply and read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.