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.
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