Facebook shares on Thursday sank to a new low after the world’s leading social network reported a loss of US$157 million in its first earnings after its public offering.
The financial results were largely in line with expectations and were dragged down by reserves set aside for stock grants, but investors were evidently spooked by signs that the social network’s blistering growth rate is cooling.
Facebook shares plunged more than 11 percent to US$23.80 in after-hours trade after the news, which came a day after key Facebook partner Zynga reported disappointing earnings, dampening enthusiasm about social media.
Photo: EPA
Facebook, which made a market splash in May, said that excluding special items, its results for the second quarter showed a profit of US$0.12 a share, in line with most forecasts, as revenue rose to US$1.18 billion, a bit above market estimates.
The results showed growth for Facebook in overall revenue, operating profit and the number of users — which grew to 955 million by the end of the quarter.
Revenue for the second quarter totaled US$1.18 billion, an increase of 32 percent from the same period a year ago.
Advertising revenue — 84 percent of the total — was US$992 million, up 28 percent.
Excluding share-based compensation and related expenses, profits from operations for the second quarter were US$515 million, compared with US$477 million for the second quarter of last year.
In the release, Facebook said its monthly active users rose to 955 million as of June 30, an increase of 29 percent from a year ago.
Daily active users increased 32 percent to 552 million and mobile active users rose 67 percent to 543 million.
The rate that Facebook has been adding monthly and daily active users has slowed steadily from this time two years ago, when the numbers were more than doubling.
Facebook founder and chief executive Mark Zuckerberg offered no comment on the financial results, but repeated the company’s mantra.
“Our goal is to help every person stay connected and every product they use be a great social experience,” he said in a statement.
“That’s why we’re so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends,” he said.
However, Global Equities Research analyst Trip Chowdhry said the results confirmed his pessimistic outlook for Facebook.
“Facebook is an unproven company, with unproven concepts, along with mediocre management,” he said in a note, calling the company “overhyped and under-delivered.”
Facebook shares have been in a funk since their much-hyped May 18 debut was plagued by technical glitches and complaints that key forecasts were kept from the public in what was the largest initial public offering for a tech firm.
Shares have fallen steadily since the public offering at US$38.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last