Facebook stock jumped seven percent in value one day after Zuckerberg broke his silence and publicly proclaimed that the company he helped found really cares about its shareholders.
His comments came in his first interview since Facebook’s disastrous debut as a public company in May. The company’s stock had lost roughly half of its value since then.
It had risen to $1.28, or seven percent, to $20.71 per share at the end of Wednesday’s trading.
“He said what he needed to,” Wedbush Securities analyst Michael Pachter said. “He and Facebook care about shareholders, he is aware of and troubled by the low share price, he appears to believe the stock is undervalued, and appears to understand that he has to communicate Facebook’s strategy more clearly going forward,”
Other analysts agreed that the 28-year-old Zuckerberg did what he needed to do in his 25-minute appearance at the TechCrunch Disrupt conference in San Francisco.
“He explained past missteps and challenges related to mobile and provided reasons for related optimism,” S&P Capital IQ equity analyst Scott Kessler wrote in a research note to investors.
Zuckerberg’s appearance was part of Facebook’s orchestrated effort to buck up confidence on Wall Street and quiet persistent questions about whether the youthful Zuckerberg should be leading the company.
Zuckerberg made positive comments about the company’s mobile business while acknowledging the missteps of relying on HTML5 rather than native apps.
He also signaled that Facebook might get into the search business, a move that would ratchet up competition with rival Google. He said that Facebook already processes about 1 billion search queries a day without “even trying.”
Zuckerberg said that Facebook had no plans to get into the hardware business and make its own phone.
“It was good to see Zuckerberg publicly present, and we think it is critical for investors to hear more directly from him,” Macquarie Securities analyst Ben Schachter wrote in a research note. “While none of his comments led us to change our financial model for the company, better understanding Zuckerberg’s priorities, motivation, and general focus is a positive for investors.”
Zuckerberg founded Facebook in 2004 while a student at Harvard.