Investors weren’t feeling especially friendly toward the social network company after its first quarterly earnings report and analyst call last night. The stock closed Friday at $23.70, down 11.7% — the lowest it’s been since it went public in May at an IPO price of $38. The stock touched $22.28 during the day, the lowest it has ever been. Friday also was the third most active trading day for Facebook, with 168.2M shares changing hands. The sell off is notable because analysts for the most part took Facebook’s Q2 results in stride. RBC Capital Markets’ Andre Sequin says that he was “pleasantly surprised by the presence and significant involvement of CEO Mark Zuckerberg on the call. The company did not offer specific forward guidance, which investors had hoped for, but instead stuck to qualitatively highlighting nascent projects.” Needham & Co’s Laura Martin urged investors to see a drop in the stock price as a buying opportunity. Cowen & Co’s Kevin Kopelman was a little more cautious saying that although “ad growth was better than we expected in the quarter, we remain concerned about the company’s ability to replace desktop ad and social game revenues with mobile revenues near-term, especially given the lack of clarity on Q3 trends.” Yesterday the company reported a Q2 net loss of $157M vs a $240M profit last year on revenues of $1.2B, +32.3%. The loss is largely attributable to accounting for stock based compensation; without that the earnings would be $295M, +3.5%.


Don’t see why anyone would invest in Facebook. We’ve seen that social media can be easily replaced. Facebook will fade away soon. Unless they do what they SHOULD do.
Should do? Explain, please.
Don’t get it either. Facebook will recover but should never have launched its IPO at $38 in the first place. Mid to high 20′s is where it will settle. Ad dollars will always be hard to come by; just ask AOL.
FB is still a short all the way down to $14 that’s what it’s worth.
It’ll be lucky if it’s worth even $8. Kodak makes more money the Facebook and their not even on the stock exchange anymore.
facebook now is like AOL in the 90s. except AOL made money because it was (the operative word here is was) an ISP that charged people by the minute based on connection time. flate rate pricing is what killed AOL’s bottomline.
facebook has no bottomline. their users are only interested in not having their normal email in-boxes clogged with spam and attachments with potential viruses. how someone turned this into a business model then got wall street excited about all this malarky is beyond me.
with facebook, as bill clinton might say, there is no there there. or to quote donald rumsfeld, facebook is ‘a known unknown.’