Facebook shares have soared by 22 per cent since early this morning after it announced better than expected third quarter earnings. (opens in new tab)
Investors were rushing to buy shares after the social network announced rapid growth in its mobile advertising revenue. Share prices have now risen to nearly $24, up from $19 just yesterday.
The company revealed that it made $150 million (£94 million) in the last three months, up from almost nothing at the beginning of the year.
Facebook's chief financial officer David Ebersman said adverts in users' mobile newsfeed generated $3 million (£1.87 million) a day with mobile advertising revenue now accounting for 14 per cent of overall $1.09 million (£680,000) revenue.
At a conference with analysts yesterday, 28-year-old Facebook creator Mark Zuckerberg said that mobile was the "most misunderstood aspect" of the company and he wanted to "dispel the myth that Facebook can't make money on mobile".
(opens in new tab)"This may have been true six months ago, because we hadn't started trying yet. Over the long run we're going to see more monetization per time spent on mobile than on desktop", he added.
Today's rush for Facebook shares is a far cry from the company's overall track record on Wall Street since its much hyped $104 billion floatation in May. In recent months, the firm's shares slumped 50 per cent from its initial floatation price of $38.
The company has been under increasing pressure to prove it can make money from its mobile platform after it was revealed that Facebook mobile users had increased by 61 per cent in the last year and now account for 604 million of its 1 billion active users.
Now that it has shown the early success of its mobile advertising, investors seem to have fallen back in love with Facebook.