Facebook shares slump 10% after Q2 loss
In its first report as a public company, Facebook said costs relating to the group’s recent initial public offering weighed on earnings. Costs near tripled to $1.93bn, largely driven by the cost of share-based compensation and related taxes.
Shares dropped to $23.84 in after-hours trading, down 37% on the company’s issue price of $38 at the time of its IPO in May. The stock had already fallen 8.5% yesterday as social gaming peer Zynga reported poor reults.
Facebook’s revenue rose by 32% year-on-year for the second quarter to reach $1.2bn, in line with estimates but down on the 45% growth rate seen in Q1 2012.
The company had previously said its mobile advertising revenue was lagging increases in mobile phone usage among its user base.
Facebook CEO Mark Zuckerberg said mobile remains a “huge opportunity” for the company, as COO Sheryl Sandberg said new services would help boost mobile advertising revenue and the company committed to further investment.
“At this early stage of our growth, investment is a top priority as opposed to managing for a target margin,” CFO David Ebersman said.