However, including stock-based compensation, payroll taxes and income tax adjustment, Facebook lost 8 cents per share compared with earnings of 11 cents per share in the year-ago quarter.
Quarter Details
Facebook's revenue jumped 32.3% year over year to $1.18 billion, slightly ahead of the Zacks Consensus Estimate of $1.15 billion. The year-over-year growth was driven by strong advertising revenue (84% of the total revenue) that climbed 28% year over year to $992.0 million. Facebook generated the rest of the revenue from payments & other fees in the quarter.
The strong upside in advertising revenues was primarily driven by an 18% increase in the number of ads delivered based on growth in the user base and an increase in average number of ads per page from the prior-year period.
However, strong growth in mobile user base continued to hurt Ad impressions, particularly in the US, where number of ads delivered decreased 2.0% year over year in the quarter.
Average price per ad increased 9.0% year over year, primarily aided by a 20% increase in CPMs in US due to the roll out of sponsored stories in news feed during the quarter for PC and mobile users. Price per ad growth was also strong in Asia and rest of the world, which fully offset a decline in Europe.
Monthly Active Users (MAU) improved 29% year over year to 955 million at the end of June 30, 2012. Mobile MAUs surged 67.0% year over year to 543 million at the end of quarter. During the same period, Daily Active Users (DAU) increased 32.0% year over year to 552 million.
Average revenue per user (ARPU) was $1.28 in the quarter, up double-digits in the US, Asia and rest of the world. ARPU grew 8.0% in Europe in the quarter.
However, this healthy growth in revenue and user base was partially offset by higher costs and operating expense in the quarter, particularly due to stock-based compensation, which totaled $1.3 billion in the quarter. Excluding this effect, operating expenses shot up 60.0% year over year to $669.0 million, driven by headcount growth and costs incurred related to infrastructure development.
Facebook's operating income increased 8.0% year over year to $515.0 million. However, including stock-based compensation and payroll-tax expenses related to share based compensation, the company reported an operating loss of $743.0 million.
Net Income was up 3.5% year over year to $295.0 million. However, including stock-based compensation, payroll-tax expenses related to share-based compensation and income tax adjustments, the company reported net loss of $157.0 million in the quarter.
Facebook ended the quarter with cash & cash equivalents of 10.19 billion. The company generated $242.0 million as cash flow from operations in the quarter.
Outlook
Facebook expects operating expenses to increase at a much faster rate compared to the second quarter in the second half of this year. The company expects steep rise in research & development expenses mainly due to continued investments in product development for mobile segment and infrastructure.
Our Take
We believe that Facebook has significant growth opportunities from increasing online advertising spending as compared to traditional formats. Facebook's massive user base and its ability to track personal details over time make it a formidable force in the online ad market. Facebook can use this massive database to help advertisers target relevant ads going forward.
However, increasing competition is the primary headwind for Facebook over the long term. Besides competition from Google+, Twitter, Orkut in its core markets, Facebook is also competing against small regional platforms, which not only limit its expansion opportunities but also hurt its profitability.
Facebook is facing significant competition in the display advertising market from Google ( GOOG ). Rising concerns over the effectiveness of Facebook ads as compared to Google's AdSense has been a headwind lately. As per eMarketer, Google is set to grab the #1 position in the display ad market by the end of 2013. We believe that Google's increasing popularity has the potential to limit Facebook's ad revenue growth going forward.
Further, Facebook's popularity is based on the engaging apps from its third-party developers, particularly Zynga ( ZNGA ). However, Zynga's narrow product portfolio has been primarily blamed for a waning interest in social games on the platform. Zynga's low-paying customer base and stiff competition from other established players are also hurting its top line. This does not bode well for Facebook, as the company earns the majority of its non-ad revenue from Zynga.
Apart from increasing competition, lack of visibility around mobile monetization remains a concern. Although Facebook has made a number of acquisitions (such as Snaptu, Instagram) to enhance its mobile offerings, we believe that lack of adequate ad coverage for the mobile platform will continue to hurt its revenue earning capacity going forward. Moreover, continued investments to expand mobile offerings are expected to hurt margins in the near term.
We remain Neutral over the long term (6-12 months). Currently, Facebook has a Zacks #3 Rank, which implies a Hold rating in the near term.
( Nasdaq )
Citing anonymous sources, media reports said that BranchOut, Jobvite and Work4Labs will be at least three of the companies that will pair with the platform.
With the rise of LinkedIn - and its aggressive moves into social-networking functionality - having Facebook enter the fray is an obvious play for them.
Whether or not the job posts will display in the news feed is unclear.
Many bigger companies have career recruitment presences on Facebook already, but a centralised engine behind job postings and searches would feed the engagement metrics.
According to recent estimates, the job-posting market is worth about USD 4.3 billion and everyone would like to have a piece of it.
Last October, the social networking site initiated its move towards becoming a source for job hunters by teaming up with the US Department of Labor and three employment-related agencies in an attempt to decrease the country's 9.1 per cent unemployment rate using social media a project that may eventually include a Facebook job posting system.
This partnership started a new era of formal job hunting content on Facebook which some recruiters already prefer over LinkedIn for the first time.
As part of the initiative, Facebook launched a "Social Jobs" portal that makes easily accessible educational content and tools from its partners at the Department of Labor, National Association of Colleges and Employers, Direct Employers Association, and the National Association of State Workforce Agencies.
It plans to promote this page in the 10 states with the highest unemployment rates and Puerto Rico.
The most interesting aspect of the new partnership, however, is a plan to inch Facebook into job listings territory.
Facebook's statement announcing the partnership mentioned "systems where new job postings can be delivered virally through the Facebook site at no charge."
What shape such a job posting system would take, and whether Facebook has any solid plans beyond research to pursue one, are still not clear.
A job board that lives on Facebook could put the social network in direct competition with sites like LinkedIn and Monster.com.
Facebook replaced the email address users chose when they signed up and changed it to a facebook.com address. The Facebook email accounts allow users to communicate with outside email addresses via Facebook.
The changes were first pointed out by bloggers over the weekend and publicised by media outlets Monday, leading to gripes from users, usually on their Facebook pages.
The company said in a statement in April that it was "updating addresses on Facebook to make them consistent across our site."
Facebook spokeswoman Jillian Stefanki said the site is also rolling out a setting that allows people to decide which email addresses to show on their pages.
"Ever since the launch of timeline, people have had the ability to control what posts they want to show or hide on their own timelines, and today we're extending that to other information they post, starting with the Facebook address," Stefanki said in an email late Monday.
However, pressing issues pertaining to user privacy and child safety on the social network have now led it to feature on The 15 Most Unliked Companies In America list, Business Insider now reports, painting a contrast picture.
Though social networking is an integral part of people's lives, developments over the past few months have drawn considerable ire and have triggered a lot of debate.
Another sore point has been Timeline. It presents your entire Facebook history, as well as any personal history you choose to put in, in a chronological order. However, according to a study done by IT security and data protection firm, Sophos, 51 per cent of Facebook users are concerned about the Timeline feature.
Sophos, in its study found that there are concerns that the additional information that other users have access to and the greater ease to access user information will make it easier for identity thieves and stalkers to get information, which they can then abuse.
Sophos conducted a poll of more than 4,100 random respondents from various parts of the world on their opinion of the new Timeline feature. The key findings of the study were:
- 51 per cent of users are worried about the new Facebook Timeline feature
- Only 8 per cent of users like the new Facebook Timeline feature
- 8 per cent of users say they will get used to it
- 32 per cent say they don't know why they are still on Facebook.
"People may now see ads and sponsored stories from Facebook on Zynga.com," said Facebook spokesperson Tucker Bounds. He said that Facebook does not share information about people or advertisers with Zynga, and that Facebook's advertisers do not have any new "targeting criteria."
Asked if Facebook was planning to create a full-fledged online ad network that distributes ads on other sites, Bounds said "we are only showing ads on Zynga right now."
Zynga was not immediately available for comment.
Shares of Facebook, the world's No.1 social network, were up 4.4 percent to $33.25 in mid-afternoon trading on Friday.
Facebook's stock has been under pressure since its initial public offering last month, due in part to concerns about the company's slowing revenue growth.
Facebook made most of its $3.7 billion in revenue last year from ads that appear on its site.
An ad network could significantly increase the reach of Facebook ads, offering an important new source of revenue growth.
Facebook Inc. is trying to change that. Facebook is beginning to roll out its App Center to its nearly 1 billion users, so they can find games and other applications with social components more easily.
The App Center, available on Facebook's website and on Apple and Android mobile devices, will recommend apps to users based on their interests, the types of apps their friends like, or the apps they have liked in the past.
Many people are introduced to Facebook apps in the form of sometimes-annoying requests from their friends for poker partners, Scrabble buddies or neighbors on virtual farms. Those requests haven't necessarily matched a user's specific interests.
The new App Center will initially feature about 600 Facebook apps, mostly games, reviewed by the company to meet its quality standards. Games, such as Zynga'sCityVille and Electronic Arts' The Sims, are the most popular types of apps on Facebook.
But the company is betting that by personalising recommendations to users, people will find new types of applications beyond games, along with games that are more interesting to them. There are all sorts of social apps that use Facebook, from music-listening services such as Spotify to what-you-just-ate tools such as Foodspotting.
"We spend all day, every day building a platform (so that) great social games and apps can exist," said Matt Wyndowe, product manager for apps and games at Facebook. But a common question has long been where to find them. "Up until now, we haven't had a great answer to that question."Facebook said that on mobile devices, the App Center won't compete with other app stores, such as Apple's or Google's. Rather, the App Center will send users to those other stores to download the programs. People can also get mobile apps from their regular computers by using a feature called "send to mobile."
Among the roughly 600 applications included in the App Center at launch will be the Nike Plus GPS running app, which lets users track their runs and broadcast it to their Facebook feed. Ricky Engelberg, whose title at Nike is experience director at digital sport, said having a place where apps are showcased will "let more people be part of the Nike Plus community."
The App Center, which Facebook announced last month, will be rolled out to US users beginning Thursday night and to everyone else over the coming weeks.
The online poll also found that 34 per cent of Facebook users surveyed were spending less time on the website than six months ago, whereas only 20 per cent were spending more.
The findings underscore investors' worries about Facebook's money-making abilities that have pushed the stock down 29 per cent since its initial public offering last month, reducing its market value by $30 billion to roughly $74 billion.
About 44 per cent of respondents said the botched market debut has made them less favourable toward Facebook, according to the survey conducted from May 31 to June 4. The poll included 1,032 Americans, 21 per cent of whom had no Facebook account.
Facebook's 900 million users make it among the most popular online destinations, challenging entrenched Internet players such as Google Inc and Yahoo Inc. But not everyone is convinced that the company has figured out how to translate that popularity into a business that can justify its lofty valuation.
Shares of Facebook closed on Monday's regular trading session down 3 per cent at $26.90. Facebook did not have an immediate comment on the survey.
While the survey did not ask how other forms of advertising affected purchasing behaviour, a February study by research firm eMarketer suggests that Facebook fared worse than email or direct-mail marketing in terms of influencing consumers' purchasing decisions.
"It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people," eMarketer analyst Debra Williamson said.
Those concerns were exacerbated last month when General Motors Co, the third largest advertiser in the United States, said it would stop paid-advertising on Facebook.
Measuring the effectiveness of advertising can be tricky, particularly for brand marketing in which the goal is to influence future purchases rather than generate immediate sales.
And the success of an ad campaign must be considered in relation to the product, said Steve Hasker, president of Global Media Products and Advertiser Solutions at Nielsen.
"If you are advertising Porsche motor cars and you can get 20 per cent of people to make a purchase, that's an astonishingly high conversion rate," said Hasker.
"If you are selling instant noodles, maybe it's not," he said.
Wanting engagement
About two out of five people polled by Reuters and Ipsos Public Affairs said they used Facebook every day. Nearly half of the Facebook users polled spent about the same amount of time on the social network as six months ago.
The survey provides a look at the trends considered vital to Facebook's future at a time when the company has faced a harsh reception on Wall Street.
Facebook's $16 billion IPO, one the world's largest, made the US company founded by Mark Zuckerberg the first to debut on markets with a capitalisation of more than $100 billion.
Its coming out-party, which culminated years of breakneck growth for the social and business phenomenon, was marred by trading glitches on the Nasdaq exchange. A decision to call certain financial analysts ahead of the IPO and caution them about weakness in its business during the second quarter has triggered several lawsuits against Facebook and its underwriters.
Forty-six per cent of survey respondents said the Facebook IPO had made them less favourable towards investing in the stock market in general.
While Facebook generated $3.7 billion in revenue in 2011, mostly from ads on its website, sales growth is slowing.
Consumers' increasing use of smartphones to access Facebook has been a drag on the company's revenue. It offers only limited advertising on the mobile version of its site, and analysts say the company has yet to figure out the ideal way to make money from mobile users.
Facebook competes for online ads with Google, the world's No 1 Web search engine, which generated roughly $38 billion in revenue in 2011. Google's search ads, which appear alongside the company's search results, are considered among the most effective means of marketing.
The most frequent Facebook users are aged 18 to 34, according to the Reuters/Ipsos survey, with 60 per cent of that group being daily users. Among people aged 55 years and above, 29 per cent said they were daily users.
Of the 34 per cent spending less time on the social network, their chief reason was that the site was "boring," "not relevant" or "not useful," while privacy concerns ranked third.
The survey has a "credibility interval" of plus or minus 3.5 percentage points.
Thought: Facebook ( NASDAQ:FB ) was down for few hours and was back shortly, but its stock was down since first day of IPO when it will be back? It touched $27, how much downside left or may be abyss..
Facebook's website suffered sporadic outages on Thursday (Friday in some time zones), anywhere from half an hour to two hours according to various blogs, tweets and affected users, but the company said the problem has been fixed.
"Earlier today, some users briefly experienced issues loading the site. The issues have since been resolved and everyone should now have access to Facebook," company spokesman Michael Kirkland told Reuters.
The outages came as Facebook continued to grapple with the fallout of its botched May 18 IPO. The stock has plummeted nearly 23 per cent from its IPO price, and numerous lawsuits have been filed in the wake of first-day trading glitches.
"Earlier today, some users briefly experienced issues loading the site. The issues have since been resolved and everyone should now have access to Facebook," company spokesman Michael Kirkland told Reuters.The outages came as Facebook continued to grapple with the fallout of its botched May 18 IPO. The stock has plummeted nearly 23 per cent from its IPO price, and numerous lawsuits have been filed in the wake of first-day trading glitches.
The 28-year-old’s fortune fell to $14.7 billion today from $16.2 billion on May 25, as shares of the world’s largest social-networking company dropped 9.6 percent to $28.84. That extended the stock’s losses to 24 percent from the worst- performing large initial public offering in the past decade.
“It seems to be a clear reflection that there was just too much stock issued, that the valuation was aggressive and that a lot of people who lined up to buy it really had no intention of holding it,” Jack Ablin, chief investment officer of BMO Harris Private Bank in Chicago, said today in a telephone interview. The bank oversees about $60 billion of assets.
Facebook shares closed at $38.23 on May 18, the first day they began trading, giving Zuckerberg a net worth of $19.4 billion. The Menlo Park, California-based company ended the day with a price-earnings ratio of 83.1, making it more expensive than 99 percent of Standard & Poor’s 500 Index (SPX) stocks. The company went public as the equity index was heading for its biggest monthly decline since September.
Facebook options trading began today, with volume for puts exceeding calls by 1.2 to 1, data compiled by Bloomberg show. More than 200,000 puts were traded, giving the holder the right to sell the shares at a specified price. June $30 puts were the most active contracts, with volume at 23,835. They were followed by June $34 calls and June $32 calls, which carry the right to buy the shares.
Zuckerberg is now $800 million behind Luis Carlos Sarmiento, who ranks 40th with a fortune of $15.5 billion on the Bloomberg Billionaires Index, a daily ranking of the world’s wealthiest people.
According to a the survey, feuding couples are increasingly complaining about their spouse's behaviour on Facebook in divorce filings, with inappropriate messages to the opposite sex being the biggest cause for complaint.
More than 33 per cent of divorces last year listed Facebook as a contributing factor, a study of 5000 divorce petitions by UK law firm Divorce-Online found.
The figure has shot up from just 20 per cent in 2009. "If someone wants to have an affair or flirt with the opposite sex then Facebook is the easiest place to do it," Divorce-Online spokesman Mark Keenan was quoted by the 'DailyMail' as saying.
Incriminating status updates, suspicious check-ins at restaurants and inappropriate photographs being posted online were all increasingly being used as evidence in divorces.
"People need to be careful what they write on their walls as the courts are seeing these posts being used in financial disputes and children cases as evidence," Keenan said.
According to the American Academy of Matrimonial Lawyers, 80 per cent of US divorce attorneys said the number of cases using the social network had increased.
K Jason Krafsky, co-author of 'Facebook and Your Marriage', said office romances and out-of-town affairs that took months or even years to develop in the real world happened "with a lightning speed" on Facebook.
"On Facebook they happen in just a few clicks," he said. Krafsky said the social networking website differed from traditional dating websites in that it both re-connected old flames and allowed people to 'friend' someone they may have only met once or twice.
"It puts temptation in the path of people who would never in a million years risk having an affair," he said.
Even when affairs develop offline, Facebook provides a forum for couples to inadvertently arouse the suspicions of their partners.
The UK study also found couples who had already split up were using Facebook to vent about each other, posting nasty comments for all their friends to see.
Twitter only appeared in 20 of the petitions as part of behaviour allegations. Couples complained their spouses were using twitter to make insensitive comments about them.
According to Reuters, a scandal is brewing over Facebook's actions in the hours before its IPO last Friday. Attention is focused on why underwriters revised their revenue forecasts down during the Facebook IPO roadshow, because this is a highly unusual move that casts a very negative light on Facebook. Other reports at Business Insider suggest that three underwriters who downgraded their revenue projections did so at the behest of a Facebook executive who'd had knowledge of weaker than expected Q2 performance. This information was then conveyed to selected institutional investors, in order that they may protect their income, but not broadcast to the entire investment community. Details are not forthcoming, and BI notes all parties have declined to comment. At the least this news is an uncomfortable PR matter at a critical moment, and at worst the SEC and FINRA may find Facebook guilty of financial misconduct.
The much awaited IPO of Facebook Inc, created a lot of hype on a Wall Street and might get a premium valuation than its actual valuation. Stock has started a loosing streak since day one of its trading session. After opening above $42 on the first day, it has started a steep sell off and continued to be down on the third trading session and loose more than 15 % of its value. How long will the loosing streak be extended, nobody knows, but the valuation was certainly high that is for sure. We have recommended a Sell rating on Facebook before the IPO when it was just priced $28, due to lack of convincing fundamentals of the company.
Company had offered more shares than previously announced and also revised offering price too. At this levels, we recommended a Sell on Facebook. Its a one of the notable flop listing on Nasdaq. It may not be good for investment purpose as well.
Company had offered more shares than previously announced and also revised offering price too. At this levels, we recommended a Sell on Facebook. Its a one of the notable flop listing on Nasdaq. It may not be good for investment purpose as well.
Computer systems used to establish the opening price were overwhelmed by order cancellations and updates during the “biggest IPO cross in the history of mankind," Nasdaq Chief Executive Officer Robert Greifeld said yesterday in a conference call with reporters. Nasdaq’s systems fell into a “loop” that prevented the second-largest U.S. stock venue operator from opening the shares on schedule following the $16 billion deal, he said.
While the errors were resolved and Facebook completed its offering, the day was another setback for equity exchanges trying to erase the memory of the botched IPO in March by Bats Global Markets Inc., another bourse owner. Nasdaq’s issues contributed to disappointment among investors asFacebook (FB)’s stock closed up 0.6 percent after rising 18 percent earlier.
“It’s amazing that both Bats and Nasdaq unfortunately failed in an inglorious way,” William Karsh, the former chief operating officer at Direct Edge Holdings LLC, an exchange operator that competes with Nasdaq, said in a telephone interview yesterday. “It proves that technology isn’t infallible. There are so many moving parts that things can go wrong. That’s the lesson we learn.”
The U.S. Securities and Exchange Commission said it will review the trading. Jonathan Thaw, a spokesman for Menlo Park, California-based Facebook, declined to comment.
‘Not Our Finest’
“This was not our finest hour,” Greifeld said, one day after Nasdaq’s board convened to discuss the offering. Asked if his job is secure, he said, “I certainly hope so.”
Nasdaq will use an “accommodation pool” to pay back investors that should have received executions in the opening auction, based on the decisions of a third-party reviewer, Greifeld said. It may total $13 million, he said.
Problems surfaced on May 18 at 11:11 a.m. New York time after Morgan Stanley (MS), one of the underwriters that sold 421 million shares the night before, completed its role setting the price for the trade in Nasdaq’s opening auction, Greifeld said. Nasdaq’s software for IPOs allows investors to cancel or update details of orders until the auction runs. Trade requests received during the 5 milliseconds it took to operate the auction disturbed the process, leading to an imbalance of buys and sells and sending the program into a loop.
Manual Intervention
Nasdaq officials manually intervened to allow the auction to occur at 11:30 a.m. The IPO software “didn’t work” even after thousands of hours of testing for “a hundred scenarios” aimed at anticipating problems, Greifeld said. “We’re not happy with our performance,” he said on the call yesterday.
Volume during the auction amounted to 75.7 million shares, or almost 1 percent of trading during the entire day on all U.S. exchanges, according to data compiled by Bloomberg.
“We saw on a real-time basis, obviously with the pressure of the world upon us, that this was happening,” Greifeld said. “We then manually intercepted this cross,” he said. “That manual intervention said we had to ignore the cancels that came in between the raindrops as we were processing the trade.”
Nasdaq wound up with 5,000 shares of Facebook because of its intervention, Greifeld said. A broker was used to sell the stock that had been placed in the exchange’s so-called error account for $10 million. Greifeld said he would ask the SEC for permission to add the money to the $3 million available from the exchange, according to its rules, to repay investors that should have received trades.
Some Dispute
Orders totaling 30 million shares were submitted into the opening auction between 11:11 a.m. and 11:30 a.m., Greifeld said. About half of them may involve “some level of dispute,” he said. Greifeld said he didn’t think the delay in starting trading affected the price of Facebook shares.
Adding to the day’s confusion, Nasdaq reported an issue after trading began with confirming transactions from the opening auction with the brokerages that placed them. The exchange said in a statement posted to its website at 11:59 a.m. New York time that it was having a problem delivering the messages. An update at about 1:57 p.m. said they had been sent.
“When you have a complex market system that gets overwhelmed, it fails in bizarre ways,” James Angel, a finance professor at Georgetown University in Washington, said in a phone interview on May 18. “If you don’t know whether you got filled, you don’t know your position. If you’re buying you might buy more shares and then suddenly you’ve got twice as many shares as you wanted. It makes it hard to do your risk management and hard for brokers to know how much credit to extend to customers.”
$42 at Auction
Facebook advanced 23 cents to $38.23 after surging as high as $45. It fell as low as the IPO price of $38, which valued the company at $104.2 billion. More than 43 million shares were executed at that level, the second-most changing hands at any price except for $42, the opening auction price, data compiled by Bloomberg show.
Underwriters purchased shares to keep them from falling below $38, people with knowledge of the matter said. The bankers supported the stock amid Nasdaq’s difficulties delivering trade execution messages, said one of the people, who asked not to be identified because the transactions are private.
Facebook was originally scheduled to open at 11 a.m. At about 11:07 a.m., a Nasdaq official told market participants on a conference call that the exchange was delaying the opening. Aside from assurances that an update was coming, the phone line went silent until just before the first trade at about 11:30 a.m., according to two people who were on the call and asked not to be identified because the discussions were private.
Ignoring Requests
Buy and sell requests that should have been filled in the opening auction, based on the exchange’s rules, weren’t, while cancellations for other trade requests were ignored, they said. Their employers plan to appeal some of the results they received for orders sent to Nasdaq.
Nasdaq began experiencing problems with its bid and offer quotes after the opening auction trade. By 11:31 a.m., the exchange’s highest bid, or price at which market participants were willing to purchase shares, was $42.99, and its lowest offer to sell was $42.50, according to data compiled by Bloomberg. The quotes produced a so-called crossed market, where sellers appear to be asking less than buyers are willing to pay.
Other markets continued trading, usually with a difference of a few cents between their best bid and lowest offer. Nasdaq’s quotes were marked as manual and not electronically accessible, which allowed brokers and other exchanges to ignore the venue’s prices. Its offer price later dropped to $38.01 and remained at that level, almost $4 below the highest bid, until 1:49 p.m., according to data compiled by Bloomberg.
‘Don’t Like’
“Clearly investors would hit the ‘don’t like’ button,” Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor Inc. in Cincinnati, said in a telephone interview.
The IPO price valued the company at 107 times trailing 12- month earnings, more than all Standard & Poor’s 500 Index stocks except Amazon.com Inc. and Equity Residential. The valuation also made Facebook, co-founded in 2004 by a then-teenage Mark Zuckerberg, the largest company to go public in the U.S.
Customers of London-based Fidessa Group Plc, which helps asset managers track transactions, weren’t receiving confirmation of Facebook trades, according to an e-mailed statement. Michael Cianfrocca, a spokesman for Charles Schwab Corp. in San Francisco, wrote in an e-mail: “There are currently industrywide delays in reporting trade executions. These issues do not appear to be unique to Schwab.”
TD Ameritrade
Uncertainty about whether orders received executions in the opening auction affected some clients of online broker TD Ameritrade Holding Corp., according to Steve Quirk, senior vice president of the trader group at the Omaha, Nebraska-based company. Facebook accounted for 22 percent of equities volume at the firm, he said by e-mail.
Clearing broker Pershing LLC told clients yesterday it worked through the weekend to address processing delays for purchases and sales of Facebook shares. The unit of Bank of New York Mellon Corp. expects to deliver trade information to customers’ account by around 7 a.m. on May 21, the broker said in the message.
Nasdaq shares fell 4.4 percent, the most since October, to $21.99 on May 18 following the problems with the IPO. NYSE Euronext (NYX), its larger rival, rose 0.3 percent to $24.61.
Facebook shares traded 582.5 million times on May 18, or about 6.6 percent of total volume on U.S. exchanges, according to data compiled by Bloomberg.
“I don’t think you’ll see a long-term downturn of volume on Nasdaq,” Karsh said. “Nasdaq will pick up a couple percentage points because it’s the primary listing venue for Facebook.”
Facebook founder and CEO Mark Zuckerberg updated his status to "married" on Saturday.
Zuckerberg and 27-year-old Priscilla Chan tied the knot at a small ceremony at his Palo Alto, Calif., home, capping a busy week for the couple.
Zuckerberg took his company public in one of the most anticipated stock offerings in Wall Street history Friday. And
Chan graduated from medical school at the University of California, San Francisco, on Monday, the same day Zuckerberg turned 28.
The couple met at Harvard and have been together for more than nine years.
A company spokeswoman said Zuckerberg designed the ring featuring "a very simple ruby" that he designed himself.
The ceremony took place in Zuckerberg's backyard before fewer than 100 guests, who all thought they were there to celebrate Chan's graduation.
Even after the IPO, Zuckerberg remains Facebook's single largest shareholder, with 503.6 million shares. And he controls the company with 56 percent of its voting stock.
The site, which was born in a dorm room eight years ago and has grown into a worldwide network of almost a billion people.
Zuckerberg founded Facebook at Harvard in 2004.
He was named as Time's Person of the Year in 2010, at age 26.
Zuckerberg grew up in Dobbs Ferry, N.Y.
The long awaited multibillion dollar Social Network Facebook Inc offerings set to open in an hour under the ticker FB on Nasdaq. How will it trade on day first and will it cheer stock markets?Catch the live action here
-Facebook opening bell delayed: Nasdaq
-Facebook shares opened just flat,6 % ( $40.5 ) higher to offering price of $38. Nothing like circuit breaker hit and no excitement. No panic buying seen as share started sleeping. Don't buy now as stock might slip in red soon. Check out our view Why Facebook is a sell? It has slipped from day high of $43.20. There is no more appetite for social media offering and might turn out to be a flop listing
-Facebook Share drift to $38 and might slip soon
-Facebook Share close to $38 at final minutes of trading left
Facebook's IPO price range is now final, and there will be no amendments to it on Thursday, a source tells CNBC.
This means that the company and its underwriters will be working with its current price range of $34 to $38.
Under the U.S. Securities and Exchange Commission's rules, Facebook can still price up to 20 percent above that range with $45 representing an absolute maximum.
The company is expected to price its IPO on Thursday and begin trading on Friday.
This means that the company and its underwriters will be working with its current price range of $34 to $38.
The company is expected to price its IPO on Thursday and begin trading on Friday.
Thought:
Survey showed that fifty percent of american thinks that Facebook is a passing fad, means it is just enthusiasm about it which will fade soon. But Mr Mark Zuckerberg dreaming it as a big hit and offering price has raised today. Facebook will show ad to the users to earn revenue, but question is " Is there somebody out there who knows computer, internet, social network and still don't have facebook ID? From where the new users will keep joining facebook and how many are those left? Will all the users spend equal or more time day by day, will it be so interesting day by day? Read Why Facebook is a Sell
Survey:
The company Mark Zuckerberg created as a Harvard student eight years ago is preparing for what looks to be the biggest Internet IPO ever. Expected later this week, Facebook's Wall Street debut could value the company at $100 billion, making it worth more than Disney, Ford and Kraft Foods.
That's testament to the impressive numbers Facebook has posted in its relatively brief history. More than 40 per cent of American adults log in to the site -to share news, personal observations, photos and more- at least once a week. In all, some 900 million people around the world are users. Facebook's revenue grew from $777 million in 2009 to $3.7 billion last year. And in the first quarter of 2012 it was more than $1 billion.
Just a third of those surveyed think the company's expected value is appropriate, 50 per cent say it is too high. Those who invest in the stock market are more likely to see Facebook as overvalued, 58 per cent said so. About 3 in 10 investors say the expected value of shares is fair.
But price worries won't necessarily stop would-be investors. Half the people surveyed say they think Facebook is a good bet, while 31 per cent do not. The rest aren't sure. Americans who invest in stocks roughly agree, although investors who are more "active" - those who have changed their holdings in the past month -are more negative. Nearly 40 per cent say Facebook would not be a good investment.
Young adults, a majority of whom log on to Facebook daily, are more willing to dance to their hoodie-wearing piper, 28-year-old CEO Mark Zuckerberg. Among Zuckerberg's peers, adults under age 35, 59 per cent say Facebook is a good bet. Compare that to the views of senior citizens: Only 39 per cent age 65 and over say Facebook shares are a good investment. Nearly half of Gen X'ers (ages 35-44) say the company is a good bet, as do 55 per cent of middle-aged people.
Those under 35 are the generation most interested in Facebook's IPO because they've grown up immersed in the social network. They were the first users, logging in from their college dorm rooms. Later, Facebook expanded to allow high school-age and even younger students to sign up. It's become an integral part of their lives, giving them a launching pad to spread the news of life's major developments through posts and pictures.
Conversely, it's the rare senior citizen on Facebook: Just 21 per cent have an account. Half of baby boomers - the generation born in the years after World War II - have one. But most of the 56 per cent of the country that's on Facebook is young - two-thirds of Gen X'ers and a staggering 81 per cent of people 18-35 use the social networking site.
Young people aren't just connected. They are constantly tethered to smartphones, tablets and notebook computers. Even with the rise of alternative social networks like Twitter and Google Plus, 55 per cent of Zuckerberg's peers go on Facebook every day. A third log on several times a day. Despite the intensity of their use, a narrow majority of young adults predict Facebook's appeal will fade down the road (51 percent), fewer think it will stick around as a service (44 percent).
The public overall is similarly divided on the company's future. Just under half of adults (46 percent) predict a short timeline for Facebook, while 43 per cent say it has staying power.
Young people are more aware of Zuckerberg and have more positive views of the CEO, who celebrated his 28th birthday on Monday. Overall, one in five Americans say they've never heard of him, 30 per cent don't have an opinion and 14 per cent plain don't like him. Only about a third have a good impression of the CEO, who has alienated some with Facebook's ever-changing approach to user privacy.
But 46 per cent of people under 35 like him. And a scant 4 per cent of those younger adults say they've never heard of him.
The privacy issue is a stinger. Three of every five Facebook users say they have little or no faith that the company will protect their personal information. Only 13 per cent trust Facebook to guard their data, and only 12 per cent would feel safe making purchases through the site. Even Facebook's most dedicated users are wary - half of those who use the site daily say they wouldn't feel safe buying things on the network.
As for how Facebook makes most of its money -selling ads- 57 per cent of users say they never click on them or on Facebook's sponsored content. About another quarter say they rarely do.
Despite user discontent about privacy, Facebook and Zuckerberg have connected with many Americans. The survey suggests that his reputation and youth seem more like assets than liabilities. For those who have heard of the CEO, two-thirds are at least somewhat confident in his ability to run a large public company. Twenty-two per cent doubt he can handle the leadership role. As for the social network he created, 51 per cent of Americans clicked "Like."
The Associated Press-CNBC Poll was conducted May 3-7, 2012 by GfK Roper Public Affairs and Corporate Communications. It involved landline and cell phone interviews with 1,004 adults nationwide and has a margin of sampling error of plus or minus 3.9 percentage points.
The social networking giant is expected to disclose the new range in an updated IPO filing with the Securities and Exchange Commission that could come as early as Tuesday morning, according to one of these people. At $38, the company would be valued at roughly $103 billion.
Facebook has seen strong demand from investors: the deal became highly oversubscribed only a few days after the company began marketing the deal on its IPO roadshow last week.
Facebook is expected to price the offering on Thursday night, and begin trading on the Nasdaq on Friday under the ticker “FB”.
The deal is being led by Morgan Stanley, JPMorgan and Goldman Sachs, with a total of 33 banks acting as advisors.
Facebook declined to comment on the IPO.
Facebook Inc. (FB)’s initial public offering has so far generated lower-than-expected demand from institutional investors who are concerned about the company’s growth prospects, people with knowledge of the matter said.
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Facebook executives have another week to market the IPO, scheduled to price on May 17, and underwriters are stepping up efforts to drum up interest from large shareholders, one person said. Underscoring concerns that growth may taper for the world’s biggest social network, 79 percent of respondents in the Bloomberg Global Poll of 1,253 investors, analysts and traders who are Bloomberg subscribers said Facebook doesn’t deserve a valuation at $96 billion, the high end of its projected range.
“Expectations on Facebook are way too high,” said Mitsuo Shimizu, a market analyst at Tokyo-based Iwai Cosmo Securities Co. “Given its fundamentals, the company doesn’t look anywhere cheap in valuation.”
Lackluster interest from institutional investors at this stage could compel the company to rely more on buying from retail investors, from whom demand remains robust, people said. The company could still elicit enough demand to sell shares at or above the high end of a projected range, people said.
Slackening Growth
Institutional investors tend to hold shares longer than retail investors, lessening a stock’s volatility.
Chief Executive Officer Mark Zuckerberg plans to raise as much as $11.8 billion through the IPO, the biggest in history for an Internet company.
The Menlo Park, California-based company is seeking a market value of as much as $96 billion, and is offering 337.4 million shares at $28 to $35 each. The shares will be listed on the Nasdaq Stock Market under the symbol FB. Morgan Stanley (MS), JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS) are leading the sale.
Facebook is offering 180 million shares, while existing owners such as Accel Partners, Goldman Sachs and Digital Sky Technologies are offering 157.4 million shares. Zuckerberg is offering 30.2 million of his 533.8 million shares, and may control 57.3 percent of the voting power of Facebook’s capital stock outstanding after the offering, regulatory filings show.
Jonathan Thaw, a spokesman for Facebook, didn’t respond to a request for comment.
Facebook, co-founded by Zuckerberg in 2004 in a Harvard University dorm room, seeks a valuation at 24 times revenue, compared with 5 times for Google Inc., according to data compiled by Bloomberg.
Already the company’s growth has shown signs of slackening. Sales climbed 88 percent to $3.71 billion last year. According to researcher EMarketer Inc., revenue may increase 64 percent to $6.1 billion this year. That would be the third straight year of slowing growth.
Read Why one should sell Facebook instead of buying it?
Read Why one should sell Facebook instead of buying it?
