Facebook Inc. (NASDAQ: FB) Saw an Increase in Its Short Interest

The figure of those stocks of Facebook Inc. (NASDAQ: FB) that recently sold short is rising. The Class A shares of the company rose from 632,000 to a total of 34.8 million shares. According to market experts, the reason for this increase is the record high stock price of Facebook. The analysts at Wall Street are wondering as to what can cause another surge in the stock prices of Facebook Inc. (NASDAQ: FB).

The stocks of the company were being traded at $82.17 during the most recent trading period. This price is almost 140 percent of the price that was prevailing in the market last year. The rise is quite significant when compared with the rise of 115 percent in Nasdaq’s composite for tech. The market capitalization of Facebook Inc. (NASDAQ: FB) is recorded to be at $225 billion, whereas, the revenue rate for the whole year came to a total of $15 billion. It is important to mention here that this revenue rate was determined after the release of the company’s financial reports for its most recent quarter.

The revenue for the recent period saw an increase of $1.2 billion; however, the net income remained at $806 million. According to market analyst, this increase in net income is quite slim, especially for a tech giant like Facebook. The management of the company said that Facebook is investing its money in the future growth of the company, and hence, is not dying for profits.

It is worth mentioning here that Facebook will be releasing another quarterly report in a matter of few weeks. The company needs to overcome three hurdles if it wants to see continuing growth. The first question that the market is posed with is as to whether the company was expand its user face any further or not, because if its user base has reached the highest point, the company’s future will be a little bit shaky. The next question is whether the company will continue to see increase in its revenues, given that the user base remains steady. The last question is whether the company can control the turn-over rate, as in, the number of people that are leaving Facebook for other social networking sites.

According to the most recent quarterly reports of Facebook Inc. (NASDAQ: FB), the company’s total user base has reached 1.35 billion. Although this number seems quite big, the yearly increase remained at 14 percent only. These figures are quite low when compared with the figures of past years, which means that growth in Facebook Inc.’s (NASDAQ: FB) membership has declined significantly.

Moreover, according to the report of Yahoo! Finance, the company may also see a reduction in its revenue growth. According to the consensus estimates, the revenues for the quarter will increase by 46 percent and reach to a total of $3.8 billion.

This is not it. Some other reports reveal that almost 67 percent of the adults use Facebook Inc. (NASDAQ: FB) whereas the remaining 18 percent are on Twitter, 15 percent are on Pinterest, and 13 percent use Instagram. The evidence suggests that the audience on other social networking sites is increasing significantly.