Facebook Posts Solid Revenue Numbers, Stock Price Plummets

Shares of Facebook fell to their lowest level since its disastrous IPO, with investors wary of slowing growth for the social media giant.

Facebook is a wildly successful company with relatively little overhead and an established market presence that will be nearly impossible for competitors to challenge. But that doesn't necessarily mean that the company is a good investment. The reality for Facebook - and for its investors - is that the company may have already experienced its strongest growth periods. After all, when your website already boasts over 1 billion active users, there really isn't much room left for astronomical growth.

Facebook has been careful to try to ramp up its ad revenue slowly. The only real danger to the social network is the potential for it to alienate its loyal user base by forcing too many ads into their faces. And if some of its fledgling competitors see Facebook making missteps in that area, there could be problems that might snowball quickly. As it stands, however, Facebook is more than secure as the go-to social platform for users around the world. Maintaining that position will require nothing more than staying the course and being content with the status quo. Pushing too hard for more growth, however, could do significantly more harm than good.

Facebook opened trading on Friday at just under $24, which is more than $14 below its IPO price of $38. For those that bought early hoping for a Google-like ascent in share price, it is simply never going to happen. Facebook is a tremendously successful company that has already generated billions for its founders and early investors. But it is not likely to be a great stock market investment for the majority of investors. At least, not until the company establishes new revenue streams that are safe to implement among its loyal user base.

Source: http://www.buzzle.com/articles/facebook-posts-solid-revenue-numbers-stock-price-plummets.html

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