Facebook investors are worried about a new stock company low of $24 as the world’s leading social network reported a loss of $157 million in its first earnings after its initial public offering.
The financial results were largely in line with expectations and were dragged down by reserves set aside for stock grants but investors were evidently spooked by signs that the social network’s blistering growth rate is cooling.
Facebook shares plunged more than 11 percent to $23.80 in after-hours trade after the news, which came a day after key Facebook partner Zynga reported disappointing earnings, dampening enthusiasm about social media.
Facebook, which made a market splash in May, said that excluding special items, its results for the second quarter showed a profit of 12 cents a share, in line with most forecasts, as revenue rose to $1.18 billion, a bit above market estimates.
The loss stemmed from accounting rules requiring Facebook to set aside reserves from restricted stock units before 2011, a fact disclosed when the company went public.
According to the rules, Facebook should take a charge against earnings of some $1.3 billion for stock awarded and related expenses.
The results showed growth for Facebook in overall revenue, operating profits and the number of users — which grew to 955 million by the end of the quarter.
Revenue for the second quarter totaled $1.18 billion, an increase of 32 percent from the same period a year ago.
Advertising revenue — 84 percent of the total — was $992 million, up 28 percent.
Excluding share-based compensation and related expenses, profits from operations for the second quarter were $515 million, compared to $477 million for the second quarter of 2011.
In the release, Facebook said its monthly active users rose to 955 million as of June 30, an increase of 29 percent year-over-year.