Shares of Facebook Inc. (FB) fell 12% to $23.75 in late trading Thursday, their lowest level ever, after the company’s first earnings report as a public entity reflected higher costs, slowing revenue growth and narrower profit margins.
Facebook, whose shares have shed a third of their value pushing the co.’s current market cap to about $58 billion (regular session: $26.84), well below the $100 billion valuation that Facebook gave itself in its $38 per share May-17 IPO debut, reported costs and expenses that nearly tripled from a year ago to $1.93 billion. The social-networking giant said its capital expenditures more than tripled to $413 million in the second quarter.
Facebook posted a 2Q net loss of $157 million, or 8 cents a share, down from earnings of $240 million or 11 cents, in the year-ago quarter. The company, which reported revenue of $1.18 billion, up 32% from $895 million a year ago — the slowest pace on record — swung to a 2Q loss largely related to expenses from compensating employees with stock upon its initial public offering in mid-May.
Excluding the charges, Facebook said it earned $295 million, or 12 cents a share, meeting expectations.
Facebook executives led by Mark Zuckerberg, the 28-year-old CEO who created Facebook in his Harvard dorm room, addressing Wall Street analysts issued no growth forecasts. While saying the company was seeing encouraging results from newly introduced ad services, Zuckerberg and his team did little else to reassure stockholders on the ongoing deceleration of Facebook’s growth rate and the idea that the company may be overvalued.
Facebook shares slumped 12% to as low as $23.75 after the results were released, bringing the stock’s decline to nearly 30% since May. The ticker finished the regular session in Nasdaq composite down 8.5% to $26.84.