Tuesday, July 31, 2012

Social Media Stocks: Facebook Inc (NASDAQ:FB) & Zynga Inc (NASDAQ:ZNGA) Extend Losses – FB, ZNGA YELP, GRPN, LNKD

Shares of social media companies continued to show selling pressure as investors are uncertain about their future prospectus including Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA). Shares of both these companies have come under investors special attention after reporting weak quarterly numbers. Investors are so bearish on the stock that both are hitting new lows in every new trading session.

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Facebook Inc (NASDAQ:FB), which could be consider as the benchmark for the social media sector, fell another 5.79% to $21.81 and made a record low of $21.61. The stock is unable to find any support and showing free fall, which has been creating panic among investors. Investors are now afraid of taking long position on the stock. It’s pre-mature to make any comment on the stock at this juncture, but technical is not at all suggesting any good news either.

Last Thursday, the company had reported a sharp slowing growth in revenue  for the second quarter. Sales in the second quarter increased 32% to $1.18 billion, topping the average estimate of $1.16 billion. The company reported a net loss of $157 million, or $0.08 a share, and profit excluding certain costs of $0.12 a share. In the last one week, the shares of the company have declined over 25%.

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Zynga Inc (NASDAQ:ZNGA) also extended loss for the fourth straight session and now trading below $3 mark. The company last week reported second-quarter sales of $332.5 million, less than the average $343.1 million analyst projection. Adjusted profit was $0.01 a share, less than the $0.06 a share estimate. The shares of the company have plunged 40% ever since the company posted its quarterly results. Shares of the company have lost 39% since reporting earnings. Moreover, investors have lost over 70% from its $10 IPO price, while losses extended to 80% from its life time high of $15.91.

Yelp Inc (NYSE:YELP) resumed downward trend after gaining over 5.50% in the previous trading session and now down 4.% to $19.78. The company will announce its second quarter earnings on August 1. It derives a major portion of its revenue from local advertising and brand advertising and also dabbles in auxiliary services like deals, reservations and bookings for additional revenue. The shares of the company have declined 17% in the last 5 days.

Groupon Inc (NASDAQ:GRPN) shares declined 2.39% to $6.73. The shares of the company were downgraded by Evercore Partners to an equal-weight or neutral rating. Analyst Ken Sena cited in a note sent to clients fears related to the transparency and disclosure of the Goods business, attached with signs of drop within the core daily deals business. 

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Linkedin Corporation (NYSE:LNKD) stock fell 1.87% to $102.23. Linkedin‘s stock had its “hold” rating reiterated by investment analysts at Needham & Company in a note issued to investors last week. Linkedin last issued its quarterly earnings data on Thursday, May 3, 2012. The company reported $0.15 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.09 by $0.06. Linkedin’s revenue was up 100.7% compared to the same quarter last year. On average, analysts predict that the company will post $0.69 earnings per share for the current fiscal year.

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