Markets

Facebook rallies as analysts praise ‘watershed’ crypto move

By Ryan Vlastelica

Facebook Inc. gained pre-market Tuesday after unveiling plans for a new cryptocurrency that analysts saw as a potentially major new profit stream.

Shares rose 1.7 per cent before the bell, putting the social-media company on track for its fourth straight daily gain. The stock has already risen more than 15 per cent from a low hit earlier this month.

Shares rose 1.7 per cent before the bell.

The recent advance has been fueled, in part, by anticipation over the crypto announcement, and the release of a white paper detailing the initiative spurred additional enthusiasm, for both Facebook and digital currencies.

“We view Facebooks introduction of the Libra currency as a potential watershed moment for the company and global adoption of crypto,” wrote Mark Mahaney, an analyst at RBC Capital Markets who has an outperform rating and $250 price target on Facebook shares. “In terms of scale and importance, we believe this new financial infrastructure could be viewed similar to Apples introduction of iOS to developers over a decade ago.”

The digital currency, called Libra, is expected to launch as soon as next year. It was designed as a way for Facebook users to send and receive money through its messaging services.

Loop Capital Markets wrote that this service represented “a large global opportunity,” and a way for Facebook to diversify away from advertising revenue. “This is among the most important initiatives at the company and may be critical to comRead More – Source

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