S&P 500 Addition Could be 2013 Facebook (FB) Catalyst
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Price: $45.04 --0%
Rating Summary:
46 Buy, 17 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 25
Rating Summary:
46 Buy, 17 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 25
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After being added to the NASDAQ-100 on Wednesday of this week, Facebook (NASDAQ: FB) investors have their sight set on a bigger target... the S&P 500.
Analyst Victor Anthony at Topeka Capital said Thursday that being added to the coveted index could be one of three catalysts for Facebook in 2013. The other being monetizing Instagram and launching a search engine.
Dan Doo, Topeka Capital Markets' Head of Equity Portfolio Trading, estimates demand of 92 million - 93 million shares of Facebook from S&P 500 index inclusion, which represents 165% of average daily volume, and approximately 10% of shares outstanding (Class A). "Therefore, 10% of the shares would have to be included in index funds, which would reduce the supply of the stock," he notes.
Anthony notes that of the eight selection criteria for inclusion into the S&P 50 index, the see classification and the financial viability criteria, as two sticking points, with the latter likely the biggest hurdle. "However, we believe both can be overcome." The analyst points out that Google (GOOG) was added to the S&P 500index after the close on March 31, 2006 (announcement made on March 23, 2006), one year and seven months after its IPO. Using the same approximate length of time as Google, Facebook could be added in December 2013.
The firm maintained a Buy rating and $36 price target on Facebook.
For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.
Shares of Facebook are up 3.9% to $28.66.
Analyst Victor Anthony at Topeka Capital said Thursday that being added to the coveted index could be one of three catalysts for Facebook in 2013. The other being monetizing Instagram and launching a search engine.
Dan Doo, Topeka Capital Markets' Head of Equity Portfolio Trading, estimates demand of 92 million - 93 million shares of Facebook from S&P 500 index inclusion, which represents 165% of average daily volume, and approximately 10% of shares outstanding (Class A). "Therefore, 10% of the shares would have to be included in index funds, which would reduce the supply of the stock," he notes.
Anthony notes that of the eight selection criteria for inclusion into the S&P 50 index, the see classification and the financial viability criteria, as two sticking points, with the latter likely the biggest hurdle. "However, we believe both can be overcome." The analyst points out that Google (GOOG) was added to the S&P 500index after the close on March 31, 2006 (announcement made on March 23, 2006), one year and seven months after its IPO. Using the same approximate length of time as Google, Facebook could be added in December 2013.
The firm maintained a Buy rating and $36 price target on Facebook.
For an analyst ratings summary and ratings history on Facebook click here. For more ratings news on Facebook click here.
Shares of Facebook are up 3.9% to $28.66.
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