Shares of Facebook Inc(NASDAQ:FB) ended the past week with a loss for the third straight week as the stock slumped another 17.50% and
made another record low of $22.28, but ended the week bit higher at $23.70.
In brief, there is no support to the stock and it
could fall where investors want to take it as the stock went into the free fall
mode despite in line results. Unlike other big companies, the only concern markets
have is the company didn’t provide earnings guidance. This was the company’s first
ever public reported earnings and which was not at all impressive in any terms.
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The company’s earnings of 12 cents a share in the
second quarter and revenue of $1.15 billion were almost in line with average
analysts forecast of 12 cents a share on revenue of $1.15 billion.
Shares of FB had already been under selling pressure
on concerns over the company’s failed strategy to monetize its ad revenue from
the mobile users, where the number of users has started picking up
significantly. There is no doubt that the company needs to come out with an
effective strategy to attract more advertisers targeting mobile users, if not
then the stock may continue to plummet.
In May, the stock went public and hopes were quite
high only on the basis of the company’s mass users- almost 1 billion mark.
However, only building users base is not sufficient for the company, they need
to monetize in a better way to impress its investors as well as advertisers.
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Shares of the company ended lower by 11.70% on Friday
followed by a fall of 8.50% in prior trading session after Zynga spooked
investors by trimming its earnings guidance.
Speaking about other social media stocks, things
were not quite good too there, Yelp Inc(NYSE:YELP) had seen a loss of about 19%
in the past week, Pandora Media Inc(NYSE:P) lost over 5% - thanks to a bounce
back of 7.20% in Friday’s session. Zynga Inc(NASDAQ:ZNGA) was the biggest loser
and slumped as much as 36%.
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