Another new trading day, but for Facebook Inc (NASDAQ:FB) it’s the same old story.. shares tumbling to an all-time low.
In today’s afternoon trading session, the networking giant’s stocks were down to an all-time low of $20.07 against the May initial offering price of $38. The company has been losing out since its announcement of quarterly results as a new public company. It reported revenue growth of 32 percent, against more than 100 percent growth for the same period last year. Facebook Inc (NASDAQ:FB) is the first US Company to hit the market with over $100 billion in valuation. Despite hitting such lows, still its market capitalization is around $49 billion, and enjoys twice the price earnings ratio when compared with the rival Google Inc (NASDAQ:GOOG).
Looks like tumbling stocks are not its only worries, yesterday, two of its senior executives, Katie Mitic, former director of platform marketing, and Ethan Beard, head of platform partnerships, announced their intentions to leave the company to pursue other opportunities. In June, the company’s chief technology officer, Bret Taylor, expressed the same intentions. The social networker is getting hit on all fronts. Its operating margin and sales growth have declined. In last week’s call, management revealed that its number of ads in the US fell 2 percent last quarter and its daily user count increased 10 percent.
“Ad impressions continued the recent trend of growing more slowly than users, as more of our usage is on mobile devices,” said Chief Financial Officer David Ebersman. “This trend is particularly true in markets such as the U.S., where Smartphone use is expanding rapidly.” Facebook Inc (NASDAQ:FB) launched its mobile-advertising platform just six months ago
Despite growth in global users, concerns have been raised over the authenticity of these accounts, as it is being alleged that the increase in users is contributed by duplicate accounts, pages for pets, and those designed for spam. The company itself said in its quarterly filing with the US Securities and Exchange Commission, that out of total new 955 million accounts, as many as 83 million may be fake. It further said that totally fake accounts could be as high as 4.8 per cent of active users. Another 2.4 per cent may be for a business, group, or “non-human entity such as a pet”, and 1.5 per cent is likely “undesirable” accounts that use the accounts for spam or other malicious activity. “We believe the percentage of accounts that are duplicate or false is meaningfully lower in developed markets, such as the United States or Australia, and higher in developing markets such as Indonesia and Turkey,” Facebook said in its filing.
The networking company’s stocks are expected to fall further in coming days, to be precise on Aug. 16. On this date the IPO will complete 91 days, allowing insiders, such as company officers, directors, and employees, to sell 268 million shares of stock. Then again between 91 and 181 days, insiders will be able to sell an additional 137 million shares. Given its current performance, the coming days won’t be easy for the giant.