Cantor's Youssef Squali believes Facebook's (FB +4.5%) ad load (the proportion of news feed content consisting of ads) has doubled in Q4 to 10%. Though Facebook typically sees its ad load rise in Q4 Squali thinks there's an improvement in ad quality this time around, with more sales to major brands and "a greater mix of higher-priced click-to-play video ads."
The remarks come only two months after Facebook made investors nervous by stating it won't significantly increase its news feed ad load going forward, and will focus on improving quality.
In addition to Squali's note, shares could also be getting a lift from the fact Facebook's 70M-share, $3.85B stock offering was priced at only a modest discount to where shares traded before the offering was first announced.
Meanwhile, Facebook has struck a deal with T-Mobile USA (TMUS +0.9%) to offer free access to Facebook and Facebook Messenger to users of the #4 U.S. carrier's GoSmart prepaid services, whether or not they have data plans.
Facebook has already reached similar deals with many international carriers, in an effort to grow its user base and mobile engagement in markets where many Internet users are mobile-only.
Shares are making new highs, and are up 116% YTD.