On Friday, after Facebook reported its first every quarterly earnings late Thursday, investors took a $10 billion swipe off the overall value of the company. The result was the share price reached an all time low, after the executives from the social network did not offer any forecast and Wall Street analysts said investments in the mobile sector would put futures earnings for Facebook under pressure.
The drop in price of a share of Facebook of 17% took the company’s market value to $48 billion, half of what it was when its IPO was launched for $100 billion in mid May. Friday’s slide cost Mark Zuckerberg, the company founder and CEO almost $2.3 billion.
On Thursday, when earnings were reported, Facebook barely beat expectations by analysts, but there was no reassurance by the company to investors about future prospects of the company. Investors became worried about how Facebook would generate revenue from advertising in the mobile sector and had hoped the company would have signaled that its revenue was growing.
Company shares have dropped nearly 40% of their original value since Facebook’s debut on May 18 for $38. On Friday morning, the shares reached a record low of just $22.28 before recovering to $23.03. Facebook, on Friday, was the most heavily traded stock by far in the market. Over 52 million shares changed hands.
Four brokerages cut price targets on the stock, although the majority of them suggested the stock was worth more than what it was currently selling at. Facebook is only eight years old and now has over 995 million active monthly users.