Facebook Faceoff

Unhappy Investors Drive Facebook Stock to an All-Time Low

They did not like the words that are coming out of Zuck's mouth.
screen shot 2012 07 27 at 10 24 41 am Unhappy Investors Drive Facebook Stock to an All Time Low

(Photo: Yahoo Finance)

Yesterday afternoon, Mark Zuckerberg croaked through Facebook’s first-ever earnings call, reporting the social network’s second quarter results. Investors, whose expectations were already remarkably low, must not have liked what they heard.

The stock fell 13 percent overnight. It got worse from there. The AP just tweeted out that Facebook stock has hit a new low.

The stock plummeted more than 15 percent earlier today, currently trading at $22.92, down from its $38 IPO price. Facebook beat Wall Street’s expectations by a slim margin, posting revenue increases of 32 percent last quarter, up to $1.18 billion. However, revenue climbed 44 percent in Q1.

Analysts are citing decelerating revenue growth, especially as the costs of hiring and technology are increasing, and Facebook’s unwillingness to forecast the rest of the year.

After its IPO day flub and Wall Street’s diminished projections, investors were hoping that its first earnings results would change the disappointing narrative.

All hopes seem to rest on the company’s ability to monetize mobile. On yesterday’s call, Mr. Zuckerberg noted that mobile users are 20 percent more likely to check Facebook on any given day. But despite the switch to smartphones, Facebook only started showing mobile ads in May.

As the AP reports:

“People are waiting for a really huge growth moment in revenue, advertising, dollars per user,” said Alex Ashby, research analyst at Global X Funds, a provider of a social media exchange-traded fund. “People had expected that Facebook is going to revolutionize advertising…we think it’s still a definite possibility, but maybe further down the road.”

Sponsored Stories, which use your face to sell stuff to your friends, might be what investors are banking on–they’re currently generated $1 million in revenue a day and helped grow overall CPMs by 20 percent. But all the cautious talk about not ruining your newsfeed didn’t sound very revolutionary to us.  Don’t worry, guys, we’re gonna hate it no matter what!

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com