NEW YORK – Facebook’s stock hit a new low Friday after it reported second-quarter results that disappointed investors.
The stock fell $3.90, or nearly 15 percent, to $22.94 in morning trading Friday. Facebook’s initial public offering of stock priced at $38, and its low had been $25.52, hit June 6. The stock is now about 39 percent below its IPO price.
Facebook reported stronger-than-expected revenue and a gain in user numbers, but investors weren’t impressed.
Although revenue grew 32 percent in the second quarter, growth has slowed from earlier this year and from previous years. That’s a concern for a newly public company. Investors are willing to value new companies highly, even if they are not making a profit, because they expect booming revenue.
Baird’s Colin Sebastian also pointed out that the company is spending more on technology and hiring, driving up expenses.