Analysis: Rumours of Facebook’s demise greatly exaggerated

It is the latest in a string of positive results that have sent stock higher and erased memories about the initial hiccups following the company’s flotation when the stock dipped below its $38 (€33.47) IPO price. The current share price, while not directly comparable, is around $108.

It makes the difference between its fortunes and rival Twitter's more pronounced. Twitter this week revealed more disappointing results that showed lower-than-expected revenue and faltering user growth.

But Facebook has been written off as a dying prospect a couple of times in recent years. In 2012, one analyst appeared on CNBC and suggested that Facebook would disappear by 2020, mainly due to its failure to adapt to the increasing shift towards mobile. And in recent times, it has been the growth of users that caused some concern, particularly among the younger demographic who, according to experts, are bypassing Facebook in favour of sharing with friends on Snapchat, Instagram and other messaging apps.

Investors may have taken some comfort, then, in the fact that user numbers continued to grow in the most recent quarter. According to its figures, Facebook had 1.65 billion monthly active users up until the end of March, compared with 1.44 billion in the same period a year earlier. Out of those users, 1.5 billion are mobile.

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Founder Mark Zuckerberg said the plan was to keep investing in the Facebook app and platform over the next three years, with constant improvements being the key.

“Growth isn’t happening because we came up with one or two big changes,” he said.

Facebook has taken some interesting steps, from its purchases of Instagram and WhatsApp to the addition of virtual reality firm Oculus, some of which prompted much debate. But it seems things are starting to come together. We're reaching a "golden age" of video, Zuckerberg said, and Facebook is trying to usher it in with a push towards live video on its platform. Virtual reality, meanwhile, is becoming a more viable prospect.

The Facebook founder indicated there was more in the pipeline when he told an earnings call “there are more bold moves ahead of us than behind us”.

One of those bold moves could be the proposed stock split that will allow Zuckerberg himself to retain control of the company while still fulfilling his promise to sell off his shares to fund philanthropic projects. It's a route that Google also took, creating a new class of non-voting shares.

It is a good time to propose such a change. When things are going so well, investors are likely to want to see Zuckerberg remain in charge.

Mark Priest, head of Index and Equity Market Making at ETX Capital said it was “reassuring” that the founder wanted to stay at the helm.

“His leadership is crucial and investors can only hope he sticks around for as long as possible.”