Facebook crashes, then recovers, on earnings news
Investors are very nervous about where this volatile stock is headed.
Investors didn't really have any reason to hate the results. Facebook had a clear beat on both earnings and revenue. So what gives? Perhaps Wall Street is just looking for any excuse to dump the stock, which has risen more than 50% since last fall. Investors are clearly jittery about this one.
Peter Kafka at AllThingsD notes that there weren't any red flags in the numbers. Revenue is growing and expenses seem reasonable. "So if you sold today, my best guess is that you wanted to see much more growth," he adds.
Investors seemed to warm up to Facebook after the initial horror. And all of this took place before the 5 p.m. ET conference call with analysts, so maybe CEO Mark Zuckerberg can cheer up the crowd a little.
At any rate, here are the numbers:
- Profit was 17 cents a share on revenue of $1.59 billion.
- Analysts were expecting 15 cents a share on revenue of around $1.52 billion.
- Advertising revenue rose 41%.
- Mobile revenue is now almost a quarter of total ad revenue.
- Operating margin fell to 46% from 55% a year earlier.
You can read a more detailed earnings report here.
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The current business plan is too iffy but now they have the capital to grow new ideas. It will be interesting to see this stock in five years.
Looks like another computer algorithm driven flash crash. I bet those eTrade babies are going to be washing their diapers tonight.
Q: What's dumber than a computer that sells a $30 stock for $20?
A: A computer that manages to buy a $30 stock for $20, and then turns around a millisecond later and sells it for $20.01.
So much for smart technology. Sadly, this is the new normal in markets.
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These days, they are buying high and selling higher, and think their stock picks are protected by good fundamentals.