Editor’s note: This article was first published in July 2012, as same-day market news from 26 July 2012. Facebook’s Q2 2012 revenue, the 8.5% fall in the session and Zynga’s 37.4% fall refer to that day and the July 2012 earnings season, two months after Facebook’s May 2012 IPO at $38.
The social network Facebook has just published its second-quarter results. These results were the tough exam investors were going to put the company through, testing its ability to create value in the market. Even though revenue came in above expectations ($1.18 billion, against the $1.15 billion the consensus expected), investors were left wanting more.
Facebook closed today’s stock market session down 8.50% and is now falling more than 10% in after-hours trading, so tomorrow it could trade at around $24 per share. We should remember that very soon the “ban” will be lifted on the big banks that hold shares in the company, and they could decide to get rid of them, pushing the share price down even further.
Alongside Facebook, there was a second collapse, this time by Zynga, which lost 37.40% of its value after presenting worse-than-expected results.
Tech companies are not going through their best moment, since giants the size of Microsoft and Apple have also presented poor results to the market.
In Facebook’s case, however, Zuckerberg will have to rack his brains to find a way to grow the business until his company is worth what it costs on the market. It’s a task that may well be achieved in the long term, although for now it looks complicated.
Featured image: Kevin Krejci, CC BY 2.0, via Flickr.
