Wednesday, August 1, 2012

Traders Update: Facebook (NASDAQ:FB) Shares Slides Below $21 On Lingering Uncertainty

Facebook Inc(NASDAQ:FB) shares continued their rapid descent, their fifth straight day of declines as investors continued to dump the stock in large numbers.

The stock has kept hitting record lows, falling to as low as $20.87 at one point during trading hours. The stock has now depreciated nearly 45 percent from its May IPO price of $38 per share.

Can FB Shares Rebound? Get Free Trend Analysis

Facebook's second quarter results showed slowing growth in revenues and in the absence of a forecast for future quarters has not been able to convince investors about its earning capability.

While the company's results last week roughly matched Wall Street expectations, investors had hoped to see more progress in terms of user growth and in how the company is capitalizing on the rapid rise of mobile usage. Investors wanted Facebook (FB) to "show confidence they could grow the company, and they didn't," Francis Gaskins of IPODesktop.com was quoted in USA Today. (http://www.usatoday.com/money/story/2012-07-31/Facebook-stock-hits-new-low/56620852/1)

Users are gravitating to the use of mobile devices in large nmbers and Facebook has been unable to garner enough revenues from mobile ads, suggesting that it is finding it difficult to monetise that space.

Get Free Trend Analysis on FB Here

Second-quarter revenue was $1.18 billion, Facebook reported on July 26, topping an estimate of $1.16 billion, according to data compiled by Bloomberg. Facebook’s operating margin dropped from a year earlier and payments-related sales were $192 million, below the $199.3 million average projection.

Revenue may climb 30 percent to $6.41 billion next year, from $4.94 billion in 2012, according to the average analyst estimate compiled by Bloomberg.

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