Facebook Inc.'s stock on Tuesday came within a hair's breadth of reclaiming its $38 debut price for the first time since going public in 2012, as Wall Street cheered its progress in mobile advertising.
The stock has surged more than 40 percent in the past week after the company reported blowout quarterly results, putting to rest investor concerns about its long-term business prospects.
Shares of Facebook climbed as much as 7 percent to $37.96 in heavy trading on Tuesday, before settling back to finish the regular session at $37.63.
The social network, with 1.15 billion users, has never traded at or above $38 since its initial public offering in May 2012.
Facebook's market value was cut in half in the months following the IPO as concerns about issues ranging from slowing revenue to massive insider selling made the Internet company's stock a Wall Street punchline.
Facebook options volume was frenzied on Tuesday, as overall turnover was 3.8 times the recent daily average, according to options analytics firm Trade Alert. Traders on Tuesday exchanged 694,000 calls and 300,000 puts on Facebook.
The most popular options were the weekly $38 and $37 strike calls expiring this Friday as most traders expected gains in coming days.
One player liked the weekly $32.50 strike puts expiring on Aug. 9 (next week) which appeared to be bought 15,000 times for only a dime, said WhatsTrading.com options strategist Frederic Ruffy.
Facebook's recent success building a mobile advertising business - an area where many of its rivals have struggled - and the online service's expanding number of daily users have won back investors' respect and confidence in its prospects. That has fueled a rebound in the shares, which are up more than 50 percent in July.
Facebook said last week its mobile advertising revenue grew 75 percent in a span of three months, trouncing analyst targets and delivering the company's strongest revenue growth since the third quarter of 2011.
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