Facebook's £100m Loss Sends Shares Plummeting

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Facebook's share price has taken a massive tumble after it announced a net loss of $157m (£100m) in its first earnings report since becoming a public company.

Facebook shares fell 16.5% when the Nasdaq (Nasdaq: ^NDX - news) opened on Friday - hitting a record low of just over $22 (£15).

The value is a far cry from the initial public offering (IPO) price of $38 (£24).

The company said the net loss was equivalent to eight cents per share between April and June, mainly due to stock compensation expenses following its initial public offering.

That compares with earnings of $240m (£153m), or 11c per share, in the second quarter a year ago.

Sky's technology correspondent Katie Stallard said: "This quarter they have had to pay off all of the early investors, so they were actually expecting a possibly more than $600m (£382m) loss. So, although it's a loss, it's quite substantially better than they were expecting."

Although Facebook made a loss, the company's reported revenue has grown 32% to $1.18bn (£750m), up from $895m (£570m) a year ago.

Analysts had expected slightly lower revenue of $1.16bn (£739,000). Adjusted earnings of $295m (£188m), or 12c per share, matched Wall Street's expectations.

In a statement after the loss was announced, Facebook founder and chief executive Mark Zuckerberg said: "Our goal is to help every person stay connected and every product they use be a great social experience.

"That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."

The results come two months after Facebook shares stiffed on their first day of trading, ending flat.

The much-hyped stock market flotation of the world's biggest social network ended with the stock closing with a fractional gain of just 0.97% at $38.37 (£24.19).

It has not reached that level since then.

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