All the latest UK technology news, reviews and analysis


Facebook stock plummets to $20 a share

02 Aug 2012
facebook-nasdaq

Shares in Facebook skidded to a new low of $20 per share Thursday as the company continues to struggle to raise revenues.

Facebook stock opened to strong buzz and a $38 per share price tag in May. However, poor quarterly earnings and a less than spectacular first ever earnings call have left Facebook stock on a downturn.

The slide comes after the company admitted that some 83 million of its user accounts were in fact duplicate or otherwise illegitimate profiles.

Analysts had warned that the company's original $38 per share price was too high back in May. Analysts said Facebook faced challenges growing its the ad revenue and mobile presence, threatening to derail future growth.

The company tended to side with analysts warnings of the same issues in its summary of risk factors for its original IPO filing.

"Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results," Facebook wrote in its IPO filing in May.

The company currently has fewer opportunities to gain ad revenue through the mobile platform. That may be producing growing concerns for the business, as more than half of the Facebook's monthly active users were on a mobile platform during the second quarter of 2012.

One saving grace for the company may be the strong returns for its sponsored stories ads. The company pointed out in its earnings call that the social ads, which can be monetized on mobile platforms, saw $1 million a day in profits.

Analysts have told V3 that sponsored stories ads hold strong potential for the social networking giant. However, Facebook executives have warned that sponsored story ads currently only represent a small portion of the company's total ad revenue.

Facebook has also seen major litigation troubles from its much maligned IPO. The social networking company is currently being investigated for potential giving preferential warnings about future revenues to select clients.

  • Comment  
  • Tweet  
  • Google plus  
  • Facebook  
  • LinkedIn  
  • Stumble Upon  
James Dohnert
About

James is a freelance writer and editor. In addition to ClickZ, his work has appeared in publications like V3, The Commonwealth Club, CachedTech.com, and Shonen Jump magazine. He studied Journalism at Weber State University.

More on Mobile Software
What do you think?
blog comments powered by Disqus
Poll

BYOD vs CYOD vs BYOC poll

Which approach is your firm taking to managing employees' mobile devices?
21%
14%
4%
18%
31%
12%

Popular Threads

Powered by Disqus
samsung-galaxy-s5-smartphone

Samsung Galaxy S5 video review

We break down the key strengths and weaknesses of Samsung's latest Android flagship

Updating your subscription status Loading
Newsletters

Get the latest news (daily or weekly) direct to your inbox with V3 newsletters.

newsletter sign-up button
hpv33

Data protection: the key challenges

Deduplication is a foundational technology for efficient backup and recovery

rdc2

iPad makes its mark in the enterprise

The iPad can become a supercharged unified communications endpoint, allowing users to enhance their productivity

SC Cleared data centre assistant/administrator - 2days per week, start

Job Description We are currently seeking an experienced...

Transition Manager - Managed Services

Our highly successful client is seeking Transition Managers...

Transition Manager - Managed Services

Our highly successful client is seeking Transition Managers...

Transition Manager - Managed Services

Our highly successful client is seeking Transition Managers...
To send to more than one email address, simply separate each address with a comma.