Stock drops 10% after hours following first report as publicly traded company
Facebook met or beat Wall Street expectations on its first public quarterly report since the giant social network’s hugely anticipated May IPO fizzled but the company’s shares plunged as much as 10% in after-hours trading, hitting a new low.Apparently the numbers — revenue of $1.8 billion and a loss of $157 million — didn’t go all that far in reassuring Wall Street after Facebook’s initial public stock offering was marred by everything from trading glitches on the Nasdaq to accusations of leaked information to overly optimistic pricing and the overwrought expectations of investors and fans. Anxiety surrounding Facebook’s results grew this week after social gamemaker Zynga’s results came in wildly short of predictions. Shares of Zynga, which gets most of its revenue from Facebook, got pounded, and Facebook fell. It closed down 8.5% Thursday at $26.94, rose briefly in after-market trading following the release, then tanked. The issue is growth, which has been Facebook’s big story. Revenue was up 32% from the year before, but that’s a slower pace than in the previous quarter. Facebook said its monthly active users stood at 955 million as of June 30, up 29% year on year. Daily active users were 552 million, up 32%, and mobile users totaled 543 million, up 67%. Founder and CEO Mark Zuckerberg said on a conference call that the number of active users rose across all key countries, including 3 million new users in the U.S. “Growing the network of people who use Facebook and expanding the social experiences available to them remains the foundation of our efforts and the key to our future success,” he said. “Our goal is to help every person stay connected and every product they use be a great social experience,” he added. Zuckerberg stressed the company’s focus on mobile apps as an engine for growth. “I think we’re really much closer to the beginnning here than the end in terms of what we can do. If you use the apps today, they’re relatively basic compared to what I think anyone can imagine they would want from their Facebook experience on a phone,” he said. Chief operating officer Sheryl Sandberg talked at length about opportunities for advertisers, including “sponsored stories” that build on comments by Facebook subscribers about a product.
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