- Facebook stock plunges to all-time low (CNN, July 27, 2012):
NEW YORK (CNNMoney) — Facebook’s stock opened at an all-time low, after its first earnings report failed to ease worries over slowing sales growth and its plan for mobile advertising.
Shares of Facebook (FB) tumbled nearly 15% to below $23 on Friday, 40% below the company’s initial offering price from May.
Facebook earnings matched analysts’ expectations when it reported its earnings after the bell on Thursday. The company also delivered a 32% gain in second-quarter revenue, to $1.18 billion. That slightly topped forecasts.
But investors are not sure how the company will bring in more revenue from its 955 million users. In particular, investors are concerned about how Facebook will make money off its mobile platform.
As more and more users access Facebook from smartphones, the company has faced criticism for not doing enough to keep up with the swift mobile shift. The problem is that with smaller screens on mobile devices, there is less space on which Facebook can
On a conference call with investors on Thursday, Facebook chief executive officer Mark Zuckerberg said mobile is among the company’s top priorities.
He noted that by the end of June, half of its new sponsored stories from advertisers, which generated $1 million per day, came from mobile ads.
Chief operating officer Sheryl Sandberg added that sponsored stories were the “cornerstone of mobile monetization strategy” for the company.
Facebook is not the only hyped social media company feeling the wrath of the market. Zynga (ZNGA), the social gaming company, lowered its outlook and missed forecasts when it reported earnings on Wednesday. Shares plummeted 40% on the news..
Shares of Pandora (P) and Groupon (GRPN) have also taken a big hit, falling roughly 40% and 70% since their IPOs.
The social media ETF Global X Social Media (SOCL), which owns Facebook, Pandora, Groupon and many other recent IPOs, was down nearly 2% Friday.