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Facebook Reports a Net Loss of $157 Million
Facebook seems to be out to be one of the most controversial companies in tech if not business overall. In an era when suffering is so real for so many people, the perceived smoke and mirrors of the company seems to wear thin for most commenters; yet others seem to want to believe in the hype and magic of it all. Perhaps this is more about the current aspiration to become rich easily and quickly during times of great inequality (as Nobel Prize winner Joseph Stiglitz alluded to during his recent talk at legendary DC bookstore Prose and Politics). Watch and learn.
Facebook’s stock hit a new low at below $24. It debut in min-May at $38. Analysts say that this means that Facebook’s user base is growing, but not its revenues and earnings. Just the other day, Facebook posted a net loss of $157 million, or 8 cents a share. After this inaugural earnings report, Facebook did not offer financial forecasts to quell fears about its ability to boost advertising growth. However, the company’s CEO Mark Zuckerberg said Facebook was seeing encouraging results from newly-introduced advertising services and that Facebook now has a "clear path" to building a strong mobile business.
What Others Are Saying...
The party ended for Facebook when potential investors raised the viable question about how this company could possibly be worth 100 times earnings, employs only 3000 people, and whose earnings are totally subject to the whims of advertisers. … To be worth a 100 billion you’ve got to' make something--even if its burgers.
Facebook created doubt when they announced that the CEO made a billion dollar acquisition of a no revenue company (instagram) without board approval. … It signaled that Facebook did not value money because of how easily they are able to raise it through equity sales. Additionally, the expansion of the IPO through both an increased share price as well as last minute addition of almost $2 billion worth of shares created another nagging suspicion that Facebook employees and investors wanted out.
Facebook has billions in cash and no debt. If they were still a private company, they’d have no balance sheet problems. Buying Instagram made a lot of sense because it gives Facebook photo editing tools for its mobile app and it nips a growing social network in the bud.