Facebook stock dropped to its lowest level after the social networking site in the world’s largest reported a loss of U.S. $ 157 million after the Initial Public Offering (IPO).
The results of these financial statements in accordance with the most market estimates, as influenced by reserves set aside for stock grants. But investors are clearly frightened by the signs of slowing up performance.
Facebook stock dropped more than 11% to U.S. $ 23.8 in late trading after the announcement of the performance out, a day after its main partner, Zynga also reported disappointing earnings. This is further dampen enthusiasm about social media.
Facebook, which began to take the floor on the stock in May and was reported in the second quarter earnings per share rose U.S. $ 0.12 or in accordance with the majority of the estimates. While the company’s revenue soared to U.S. $ 1.18 billion, up 32% over the same period last year, while slightly above market expectations.
Losses derived from accounting rules that require up to set aside reserves of restricted stock prior to 2011. This fact was revealed when Facebook goes public.
According to these rules, Facebook should be in-charge on the revenues of a given stock and related expenses of U.S. $ 1.3 billion.
The report shows revenue growth for the whole, operating profit and the number of Facebook users. Revenue from ads that cover 84% of the total revenue recorded U.S. $ 992 million, up 28%.
At the end of the second quarter, the number of monthly active users grow to 955 million, up 29% YoY. Daily active users rose 32% to 552 million active users Facebook Mobile rose 67% to 543 million. This figure shows a slowdown compared to two years ago.
Founder and CEO of Facebook, Mark Zuckerberg chose not to comment on those statements. While Trip Chowdry of Global Equities Research, said the report confirmed the pessimistic outlook on Facebook.
“Facebook is a company that is not proven, the concept is proven along with the management of mediocrity,” Chowdry said in a note, said that the company was exaggerated but underachieving, as quoted by AFP (07/27/2012) .
Since the IPO, the stock price up is released in the price of U.S. $ 38 down and hold. According to Chowdry, to adjust the stock price to U.S. $ 25, up to raise the incomes of up to 150%.
“But the management really did not know how to grow revenue by over 150%. IPO price was totally wrong, “Chowdry said.
Zynga shares yesterday fell 37% also fell 3% and again in late trading after the results of the financial statements up out.