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

Windows 10 poll

What are your first impressions of Windows 10?
13%
4%
10%
4%
21%
4%
44%

Popular Threads

Powered by Disqus
V3 Sungard roundtable event - Cloud computing security reliability and scalability discussion

CIOs debate how to overhaul businesses for the digital era

V3 hosts roundtable with Sungard Availability Services

Updating your subscription status Loading
Newsletters

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

newsletter sign-up button
hpv3may

Getting started with virtualisation

Virtualisation can help you reduce costs, improve application availability, and simplify IT
management. However, getting started can be challenging

ibmv3may

Converting big data and analytics insights into results

Successful leaders are infusing analytics throughout their organisations to drive smarter decisions, enable faster actions and optimise outcomes

VoIP Application Engineer (Telephony, Dialler, TCP, IVR)

VoIP Application Engineer (VoIP Telephony, Dialler, TCP...

IT Development Manager

This is a unique and senior opportunity to establish...

IT Infrastructure Manager

Closing Date: 13/10/2014 Working within a diverse and...

Security Operations Engineer - Identity Assurance Programme

The Government Digital Service (GDS) is part of the Cabinet...
To send to more than one email address, simply separate each address with a comma.