Facebook Inc (NASDAQ:FB) Falls Below $31 Mark
Shares of Facebook Inc(NASDAQ:FB) gapped down this morning and fell 0.50% to $30.94. The stock falls below $31 mark for the first time in the past two weeks.
The company is all set to report its second-quarter financial results after the market hours on Tuesday, July 26, the company announced on Friday.
This is going to be the company’s first quarterly earnings after being public and is going to be critical as investors would be keen to know the company’s development in mobile ads.
On an average, analysts are estimating the company to report 12 cents a share, while the most optimistic estimate calls for 29 cents a share and 8 cents is the lowest expectation. Revenue is projected to come in at $1.15 billion, while the most optimistic estimate calls for $1.29 billion and $1.09 billion is the lowest expectation.
In the latest quarter, the company had reported 7.50% fall in its advertising revenue quarter over quarter, while it rose 37% year over year. For the quarter the company earned $205 million on revenue of $1.058 billion in Q1 2012. Facebook only began showing ads on mobile at the end of February, but monetizing the medium is believed to be the linchpin of Facebook’s future success.
Shares of Facebook Inc(NASDAQ:FB) have been struggling to rebound amid rising concerns among investors and analysts about the company’s ability to monetize from mobile ads due to quick shift of users to mobile devices, where Facebook is less effective at generating revenue.
At the time when Facebook offered its shares in IPO, there were huge demand from wide range of investors, which pushed the underwriters to raise the company’s IPO price from $35 to $38, upper band. At that point of view, investors thought the company is going grow well considering its strong base of over 900 million users.
However, when reports started to highlight that major underwriters including Morgan Stanley and Goldman Sachs had trimmed its earnings estimate for the company at the time when IPO was under process. The whole drama took a sudden shift and therefore, the stock started showing heavy selling.