Shares of Facebook Inc(NASDAQ:FB) saw a slight bounce back in stock prices and recovered almost $2 from its record low of $22.28. The stock was recently trading lower 10.34% to $24.20.
This morning, shares of the company gapped down on concerns that the company may not be able to generate sufficient income from it’s bulk users base. Unlike other big companies, CEO Mark Zuckerberg didn’t provide any financial updates, which has created panic among investors.
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Shares of the company have been showing selling pressure since it debut in May and has lost 36% since May 18. Yesterday, the stock ended lower by 8.50% after Zynga had reported lower profit and trimmed its earnings significantly.
The company swung to a net loss in its first reported earnings after going public in May, mainly due to higher costs related to its IPO. What’s worrying investors is that the company didn’t provide enough details about its future monetization plans as users are quickly shifting to mobile devices where the company has failed to earn sufficient advertising revenues.
The key question is how would the company be able to earn from increased mobile users. In the second quarter, the company did fairly well, compared to analysts’ estimate, with earnings coming in at $1.12 a share on a revenue of $1.18 billion.