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Facebook's Earnings Report Fails To Dazzle Wall Street

FacebookwindowFacebook's much-touted stock took a hit today after the social media company offered a mixed earnings report.

BusinessWeek offers the details:

To Wall Street, at least, Facebook (FB) just belly-flopped its first earnings report as a public company. The social network reported second-quarter revenues of $1.18 billion, up 32 percent from the same quarter last year, narrowly beating analyst estimates.

But marketing and sales expenses quadrupled to $392 million, share-based compensation swelled, and margins fell from 53 percent a year earlier to 43 percent. Wall Street hated a lot of that, pummeling an already bruised stock. At one point during after-hours trading, the stock hit $23.75, an all-time low.

Facebook's initial public offering price was $38/share back in May, when it first hit the markets. It closed today down $2.50 at $26.84.

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Comments

  1. Is the wall street gang going to pile on this company and decimate it like it has done others (RIM comes to mind)? Sometimes the nerds on wall street have way too high of expectations. The worst thing facebook ever did was sell its soul to wall street. I give it a year.

    Posted by: FRED | Jul 26, 2012 9:16:25 PM


  2. A lot of people hammered Facebook and the Merill Lynch over the way Facebook was offered, but more and more it's looking like a stroke of genius for Facebook. So many tech companies get screwed when they go public, having their values sometimes even double in the first day.

    Sounds great, right? Well, that means the company that went public only got half the value for what their shares were really worth.

    Facebook demanded as high a valuation as possible... so while their stock has tanked, almost cut in half, that really means the investors were screwed. Facebook made out like bandits, raking in far more dough than they were really worth.

    Overall, that's good for the company, giving it ample resources to do whatever it wants. The question is if they can do anything with that.

    (To be honest, I kind of doubt it. More and more people are moving over to Twitter for the real social components, using Facebook as a glorified online profile page.... but that's just me. Even their platform as a place for godawful yet popular social gaming is falling asunder.)

    Posted by: Ryan | Jul 26, 2012 9:34:27 PM


  3. I love hearing anything bad having to do with Facebook. If I had my way it would never have been invented. There has been more damage than benefit. It has influenced culture in a very negative manner. It was nice to know people from your past were off living their lives, not actually having them find you and having them in your face. Mystery left life.

    Posted by: Greg | Jul 26, 2012 10:53:08 PM


  4. Enjoy your popularity while it lasts!

    Signed,

    MySpace

    Posted by: FLAVOR OF THE MONTH | Jul 26, 2012 11:40:36 PM


  5. I somehow have more than 100 friends on FB. About 5 post regularly. People are tired of it because no one cares where you're having dinner or what your kids look like. The novelty has faded.

    Posted by: Paul R | Jul 26, 2012 11:44:31 PM


  6. Facebook = CIA

    Posted by: Mike | Jul 27, 2012 12:06:51 AM


  7. Facebook used to be better when you had all those apps you could put on your page (badges, the wall drawing canvas, etc). Then they blew all of them out and made it ho-hum. Have you noticed that recently they have put ads on ALL of the available space..clutter! They got to make their money for wall street, so everything is an ad now! It's too corporate now and people are beginning to realize it. The novelty will wear off.

    Posted by: FRED | Jul 27, 2012 12:13:56 AM


  8. I would love for Facebook to die. Those guys are cocky greedy bastards.

    Posted by: Munro | Jul 27, 2012 6:09:49 AM


  9. Sigh. The anti-Facebook group-thinkers never tire of hearing themselves talk. If only they had a place to post their thoughts online.

    Facebook users are not migrating en masse to Twitter, which is a niche platform that will never attract users who don't know hashtags from retweets. Facebook users do not just post what they're having for dinner; if yours do, find more interesting friends. Facebook does not do more damage than benefit (if you believe that, you clearly weren't paying attention to world events last year). Facebook is not the next Myspace any more than Google was the next Yahoo.

    The truth is Facebook is thriving in the mobile space as more and more users are accessing it on mobile devices. The challenge for Facebook's management is to figure out how to monetize mobile, and I think they have the talent and resources to do it.

    Posted by: endo | Jul 27, 2012 7:14:44 AM


  10. Facebook encourages narcissism and other detachments from reality. Plus, it's spies on everything you do! Boycott it!

    Posted by: Gina | Jul 27, 2012 9:44:52 AM


  11. It will be a few years before they sort themselves out, but the web moves very quickly. They might be the Google of social media, the last company standing that gets all the benefits of network effects. Google had the advantage of returning a lot of good search results without annoying users. FB gets by on 3rd party apps and a huge network effect. Also similar would be eBay, though eBay was always profitable.

    Posted by: anon | Jul 27, 2012 1:16:09 PM


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