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Facebook (NASDAQ:FB) stock fell to an all-time low on Friday after the company’s inaugural earnings report failed to address concerns about its future revenue potential. Shares fell more than 15 percent to below $23, almost 40 percent below the company’s initial offering price from May 18.
The stock, which closed at $26.85 on Thursday, had also fallen hard in post-market trading after the company reported its results just after the close. While Facebook delivered a 32 percent growth in second-quarter revenue at $1.18 billion, topping forecasts, and matched earnings expectations, it offered no clues regarding its future plans. The company gave no guidance for the current quarter or the full fiscal year, leaving analysts and investors frustrated and somewhat spooked.
“The lack of guidance and the well-publicized shift to mobile is weighing” on Facebook shares, Oppenheimer analyst Jason Helfstein wrote. “Additionally, the company provided commentary suggesting higher [third-quarter] expenses.”
Results were also disappointing because the company is highly valued. “Based on the aftermarket reaction to the earnings it appears that investors wanted more than a slight beat,” analyst firm Piper Jaffray wrote in a note to investment clients.
Investors are worried that even though the social network grew to 955 million users, making money from the rapidly growing mobile platform may be hard. The company ended the quarter with 543 million active monthly mobile users, up 67 perent from a year earlier but advertising views lagged.
Facebook chief executive officer Mark Zuckerberg told analysts on a conference call on Thursday that mobile was among the company’s top priorities. “We’re investing very heavily in improving our mobile apps,” Zuckerberg said, adding the company was just “beginning to demonstrate that we can advertise effectively within the mobile experience.”
Chief operating officer Sheryl Sandberg also added that Sponsored Stories, a type of Facebook ad, were the “cornerstone of mobile monetization strategy” for the company.
Analysts don’t appear convinced just yet. “Facebook has established itself as an Internet utility, but it might take a while for Facebook to gain Wall Street love,” Citi Investment Research said in a note.
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