Constant Contact Inc surged the most since its initial public offering in 2007 after debuting a tool for small businesses to create promotional pages on Facebook.
Since Facebook Inc. filed Feb. 1 to raise $5 billion in an IPO, Constant Contact has jumped 25 percent. The provider of e-mail marketing services surged 16 percent to $30.22 at the close in New York, for the biggest one-day increase since going public Oct. 3, 2007. The stock was the sixth best performer in the Russell 2000 Index.
Constant Contact on Jan. 31 released Social Campaigns that allows small businesses to build a following using Facebook. About 10,000 users have tested the tool this year, according to the Waltham, Massachusetts-based company.
“Businesses can launch these campaigns including weekly specials, fundraisers, events, coupons and many other campaign types to their Facebook fans, Twitter followers, LinkedIn connections as well as their e-mail lists” Chief Executive Officer Gail Goodman, said on a conference call yesterday.
“Confidence in the Social Campaigns products has increased,” Steven Ashley, an analyst at Robert Baird and Co. in Milwaukee, Wisconsin, said in a telephone interview. “The key question is when does it begin to get traction and how long will it take before it begins to ramp up?”
Constant Contact derives most of its revenue from e-mail marketing for small businesses, said Jeffrey Houston, an analyst at Barrington Research Associates in Chicago. Now people realize that the new tool “may be small businesses’ best way to capitalize on Facebook,” Houston said.
The company reported fourth-quarter profit yesterday, excluding certain items, of 27 cents a share, topping the average estimate of 24 cents of analysts in a Bloomberg survey.
Constant Contact’s full-year guidance of $250 million in sales and profit of as much as 90 cents per share doesn’t include the introduction of the new social tool, Houston said.