FACEBOOK SETS RECORD FOR RISE TO $250 BILLION

It seems like just yesterday that Facebook Inc. Went public. Now its market value has topped $250 billion.

The social network company’s 2.4 percent climb to a record close on Monday, just over three years after its IPO, made it the first company in the Standard & Poor’s 500 Index to breach that market cap so quickly. The previous record holder was Google Inc., which took about eight years.

Facebook’s rapid ascent may indicate investor confidence that the company will continue to increase mobile-advertising sales on its application and others. To some degree, the gain also reflects froth in tech stocks; the Nasdaq Internet Index has almost doubled since Facebook went public.

Its shares trade at 87 times earnings, almost five times the average in the S&P 500. Companies in the Nasdaq Internet Index trade at a price-earnings ratio of 27.

“When you see stocks with these high multiples, it shows you the market’s comfort in the longer-term growth story,” said Paul Sweeney, an analyst at Bloomberg Intelligence. “Investors think Facebook is more valuable than the average Nasdaq stock.”

Troubled IPO

The company’s quick rise to $90.10 a share on Monday is even more remarkable because the stock lost more than half its value in the four months after its IPO in May 2012. Facebook had a market value of $104.2 billion at its IPO, so the company didn’t have to climb as far as some other companies did to reach $250 billion.

With a market value of $253 billion, Facebook is now the ninth-biggest company in the S&P 500 -- bigger than Wal-Mart Stores Inc. And Procter & Gamble Co., which took decades to grow as valuable.

Facebook’s revenue from advertising -- from which the company gets more than 90 percent of its sales -- increased 46 percent to $3.32 billion in the first quarter from a year earlier. More than two-thirds of that came from mobile ad sales. Analysts estimate that sales rose 37 in the second quarter, according to data compiled by Bloomberg.

Longer-term, the company plans to serve ads on other applications and websites and to make money from its rapidly growing Instagram, whatsapp and Messenger apps. Facebook also is betting on its $2 billion purchase last year of Oculus VR Inc., a virtual-reality headset maker, and efforts to expand Internet connections in developing countries.