Facebook Falls as Report Fails to Quell Concerns Over Growth
By Brian Womack – Jul 26, 2012 6:08 PM PT
Facebook executives led by Chief Executive Officer Mark Zuckerberg, addressing analysts for the first time since the companyâ€™s May 17 initial public offering, issued no growth forecasts and said little else to reassure investors who fret that the company is overvalued. The largest social network is adding users faster than it can generate ad sales, the company said, reiterating remarks it made on the cusp of the IPO.
â€œIt has become a show-me story,â€ said Nabil Elsheshai, a senior equity research analyst at Thrivent Financial. â€œThe problem is deceleration, and there wasnâ€™t anything from an outlook perspective that would indicate that is going to stop.â€
Facebook shares slumped 12 percent to as low as $23.75 after the results were released. It had dropped 8.5 percent to $26.85 by the close in New York, and itâ€™s down from $38 at the IPO.