Is that the sound of screeching brakes? It could be, at least where potential Facebook investors are concerned.
On Monday, Facebook disclosed a first quarter revenue of $1.06 billion, down six percent from the last quarter of 2012, which has been enough to raise eyebrows about the value of Facebook stock. According to the Wall Street Journal, Facebook blames the decrease on “seasonal trends” in the advertising business.
Profits are also down, but analysts have pointed out that revenue is up from a year ago and that Facebook has had greater expenses this year as it expands its infrastructure and acquisitions to support 901 million users – up 220 million from this time last year.
Is it time for real concern over the price of social media stock? Is Facebook playing it smart and getting its major expenses out of the way while still a private company, so it can exceed expectations once it becomes public? Are you going to buy Facebook stock? Do you feel like it will offer a good return?
Matt DeBord, economy reporter, KPCC