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Facebook shares tumble after posting modest results

27 July 2012

Facebook posted its first financial results since becoming a public company and listing on the Nasdaq Stock Market. Investors had been looking to the results for good news about the social network as shares have been on the slide.

In the second quarter revenues where up 32% to $1.18bn and but reported a $157m loss. For the same period last year Facebook made a profit of $240 million. “We’re disappointed about how the stock is traded but the important thing for us is to stay focused on the fact that we’re the same company now as we were before,” said Facebook’s chief financial officer David Ebersman.

Expenses have also risen to $1.9 billion, nearly four fold increase from last year second quarter. There was better news for the number of users on Facebook; 955 million monthly active users, an increase of 29% year-over-year, while mobile users was at 543 million as of 30th June, 2012, showing increase of 67%.

Facebook said that they will increase ads on the mobile version slowing so as to not anger or put off users from the network. Mobile is seen as the platform that most users will be on more and more in the future. But trying to keep users happy by not showing ads will only make investors more nervous. The share price as of 27th July is currently $22.77, a new low from its debut high of $38 a share.

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