Facebook Shares Fall After Earnings Report
Facebook's shares fell to all-time lows in after hours trading after the company's first quarterly earnings report failed to wow investors. After the earnings report, the stock was trading around $24 a share, approximately 40% below it's initial IPO value.
Facebook reported a net loss of $157 million due mainly to $1.3 billion in compensation expenses tied to stock-based pay following the IPO. However, the company did generate a profit of 12 cents per share when excluding those costs. Analysts were expecting sales of $1.15 billion and earnings (backing out the compensation charges) of 12 cents per share.
Although Facebook recently announced that the number of users grew to 955 million in the second quarter, even this news is accompanied with negative news. Yesterday, company filings showed investors that Facebook has admitted that as many as 83 million users are “fake.” The number, which is approximately 8.7% of all Facebook accounts, includes duplicate accounts, fake accounts, pet accounts, and spam accounts. Facebook indicated the problem is most pronounced in emerging markets.
Facebook is currently trading at $21.09 after climbing from below $20 a share. The company has lost over $50 billion in market value.