By Rip Empson
Facebook (FB) will replace Infosys (INFY) on the NASDAQ 100 Index on December 12th, about seven months after its IPO, NBC is reporting tonight. The news followed Infosys' recent announcement that it would be moving its listing to the New York Stock Exchange from NASDAQ in order to make its stock more available to international investors.
Facebook's stock price has taken a fairly consistent pummeling since its IPO on NASDAQ in May, giving its shareholders plenty of reasons to worry. However, beginning in the third week of November, Facebook shares began to mount a comeback, as its stock hit a four-month high on November 21st, the highest it had been since the first lockup expirations took place. Over the preceding month, the stock jumped 28 percent to around $24, and it has continued to rise, closing the day at $27.46. As Josh detailed at length, in the meantime, Facebook has begun to offer answers to these questions, and it seems that NASDAQ is now poised to respond.
The NASDAQ 100 is an index that represents the largest domestic, non-financial securities listed on NASDAQ based on market cap. Considering the dark, bumpy road that Facebook has traveled over the last six months, this would seem to be both a notable affirmation of the company's progress, as well as its general standing in the tech sector.
It's worth noting that, of the familiar names in the tech sector that have gone public over the last few years, Facebook is the first to reserve a seat among the bigs. You won't find LinkedIn (LNKD), Zynga (ZNGA), Groupon (GRPN), Pandora (P), RenRen (RENN) or Zillow (Z) listed.
In spite of the bearish perspective many analysts have taken, Facebook continues to perform (for now), with its market cap currently standing at around $59 billion, thanks to its stock having vaulted since its 52-week low of $17.55 in September. It's still not yet close to where it opened ($38/share), but it's been moving more consistently in that direction.
This has been, in part, due to Facebook's strong showing in the third quarter when the company beat Wall Street's expectations, posting Q3 revenue of $1.26 billion - up 32 percent from $954 million in Q3 2011, prior to its IPO.
Considering the fact that Facebook now has more than 1 billion users, it's not so surprising that the company got the nod instead of one of its constituents. Even LinkedIn, which has become a Wall Street darling of late, owns a market cap of approximately $11.4 billion, far below Facebook at $59 billion.
Even in its struggles, the company continues to operate a powerhouse and, with its placement in the NASDAQ 100, it will now be open for inclusion in index funds and the like, which could lead to more buying - and a continued upswing for FB.