Facebook shares rose in premarket trading after the tech giant unveiled its part in a new digital currency, or so-called “cryptocurrency,” that will be known as Libra.
The company is the leader of a group of companies and organizations that is building Libra. The cryptocurrency is expected to launch in the first half of 2019.
Facebook’s stock climbed 1.8% in premarket trading from Monday’s close of $189.01 a share.
Wall Street has been bullish on the announcement, with Facebook analysts expressing optimism beforehand about what the cryptocurrency could revolutionize the company’s digital businesses. SunTrust’s social media analyst wrote that Libra “has the potential of putting the company front and center in areas beyond advertising,” while RBC analysts said it “may prove to be one of the most important initiatives in the history of the company.”
Facebook plans to profit from Libra through its new subsidiary Calibra, which will create a digital wallet to store and exchange the cryptocurrency.
With this launch, “Facebook has its eyes set on becoming the world’s leading e-commerce platform as well,” analysts with MoffettNathanson said in a note.
— With reporting by Michael Bloom
