Perhaps the start of the London Olympics was timed as a distraction for this week’s less than upbeat economic news, some of it from the tech sector. Facebook seems to be continuing on its course to undo any high expectations, and hype, that it acquired from its May 18th IPO when its shares were priced at $38. On Friday, Facebook shares fell to a new low of $22.37 when trading began in New York on Friday. Shares closed down 11.7% at $23.71 on Friday afternoon.
The decline followed Thursday’s announcement that the company had lost $157 million from April to June.
In the second quarter, Facebook’s revenue rose to $1.18 billion, a growth of 32%. But this just barely beat forecasts and, apparently (based on the free-falling stock price), fell short of investors’ expectations.
As a result, Facebook CEO Mark Zuckerberg fell further “down the ranks of the world’s billionaires,” losing $1.6 billion of his $13.7 billion net worth. As ever, don’t cry for him: he has sold some of his stock and, as this was done just after the IPO, he let go of 30.2 million shares at $37.58 a share, enabling him to make $1.1 billion.
Analysts cited two reasons for Facebook’s disappointing report:
How much all of this means to Zuckerberg is debatable. According to CNET, it is “well understood — and Zuck and his team said as much on yesterday’s conference call — that Zuckerberg isn’t going to cater to the short-term interests of Wall Street.”
Overall, this was a week of disappointing earnings for even (seemingly) charmed tech companies such as Apple, who reported lower profits than expected. Even Starbucks’ earnings are down and there was that massive Twitter outage on Thursday.
It’s enough to make you want to shut down your machine and go for a hike or hop on your bike, the better to access Facebook via your mobile.
Might it be possible that we’re all getting “social-media fatigue”?
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