Facebook may flop after earnings

7:30 AM after, earnings, Facebook No Comments

| By Jeff Reeves, MarketWatch

The stock can't keep up this run for much longer — and investors who are sitting on big profits may be wise to sell now rather than risk steep declines.

Facebook (FB) has doubled in just a few short months, sparked by better-than-expected second-quarter earnings in July, and is up over 170 percent in the last year.

And while it's unfashionable to badmouth this social-media stock as it approaches its next earnings report, count me among the Facebook bears.

I think that even if Facebook manages to post decent numbers this week when it reports earnings, the stock can't keep this run up for much longer — and investors who are sitting on big profits may be wise to sell now rather than risk steep declines.

Here's why I refuse to "like" Facebook stock.

The biggest reason to be bearish on Facebook is that domestic and European users have flatlined. I personally expect the company to post a decline in its U.S./Canada segment this quarter, or next quarter at the very latest.

That is not going to be a pleasant headline when FB sees its first-ever drop in U.S. users after its massive growth… just look at the fireworks in Netflix (NFLX) after its subscriber drop at home as a case study.

This is disturbing for obvious reasons in regard to the saturation of these markets and how it will affect growth, but it's even more disturbing when you consider that growth in emerging markets comes with only a fraction of the revenue.

Consider these figures from Facebook's last earnings report:

U.S./Canada

Users: 198 million, or 17.1 percent of FB totalRevenue per User: $4.32
Europe

Users: 272 million, or 23.5 percent of FB totalRevenue per User: $1.87
Asia

Users: 339 million, or 29.4 percent of FB totalRevenue per User: $0.75
Rest of World

Users: 346 million, or 30.0 percent of FB totalRevenue per User: $0.63
U.S./Canada is by far the most lucrative region by geography, with Europe an obvious second.

But consider that from the first quarter to the second quarter of 2013, Facebook grew its monthly active users less than 1 percent quarter-over-quarter, and year-over-year growth was a measly 6 percent.

In its second-quarter numbers, Facebook reported that $848 million in revenue — almost half of its $1.8 billion in total revenue on the quarter — came from users in the U.S. and Canada. So even a small rollback here is going to be felt, and the lack of future upside is significant.

The situation is the same in Europe as well. Europe's monthly active users increased just 1 percent from the first quarter to the second, and a modest 10 percent over the second quarter of 2012.

The Facebook longs better be sure that this user base is going to stick, or else they are in serious trouble.

The bulls may contend that the problem, then, isn't growing the Western audience, but simply monetizing it better. And, oh, by the way, if you make more money off those "rest of the world" subscribers, then it won't take quite so many of them to offset lost U.S. revenue if the users do roll back.

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How my mom killed Facebook

6:30 PM Facebook, killed No Comments

| By Josh Herr, The Fiscal Times

More than the fears about future employment, it is the dread of awkward conversations with relatives that keeps us from posting.

Facebook (FB) has always been a cause for handwringing. In its early days, it was seen as a haven of debauchery -- exhibit A in the indictment of misguided youth -- as college students mindlessly posted pictures and comments. As adults, those same users discovered that their campus carousing might now keep them from gainful employment.

Now as the website settles into comfortable middle age, the handwringing comes from those in the biz-tech community who realize that Facebook's days of being a hot young commodity are over.

But how exactly did this happen? And what does Facebook do now?

It is a fairly well established fact that Facebook has a privacy problem. There have been countless stories of employees losing jobs or not being hired due to material posted on Facebook. Or kids suspended from class for posting pictures of their "sick day." There have been the various "slut-shaming" controversies, some of which have resulted in suicides. And earlier this summer, Facebook admitted it had accidentally exposed contact information for as many as 6 million users.

But these are extreme examples. The bigger problem with Facebook can be summed up in one sentence: "My mom is on Facebook."

Once upon a time my Facebook posting was fairly frequent, but it has now slowed to just a couple of times a month. And it's not a lack of desire to post my thoughts that keeps me from doing it, it's the knowledge that there is absolutely nothing that I can post about that could not cause problems.

During the courtship period, most of my status updates centered on politics, women, or alcohol, all of which there are very valid reasons to not talk about on Facebook anymore. But a few weeks ago, I thought I had stumbled on a rant that was still safe for our "everybody's watching me" world: a New Yorker's frustration with tourists.

On a daily basis I arrive at the subway stop at 53rd and 5th, which, for those unfamiliar, has an extremely long escalator ride up from the depths. And frequently there are tourists who don't realize that an escalator is not a ride, but a method to help you walk faster. I thought that an angry public service announcement about this would make a fine Facebook status update.

Unfortunately my mother, like any good Midwestern Irish Mom, has decided Facebook is the appropriate place to remind me that I need to be a nicer person. To do this, she responded to the thread with a story about the first time I was on an escalator. As a 4-year-old.

Like any sensible 4-year-old in the late '70s. I was convinced that the escalator would eat me at the bottom, and threw a royal temper tantrum in the middle of the Florence Mall, refusing to descend to the ground floor. My mother ultimately had to carry me down the stairs over her shoulder, while my father pretended he had no idea who that screaming child was. Needless to say, this image, of me as a hysterical child afraid of an escalator does not particularly jibe with the ice cool Brooklynite vibe I wish that I projected.

Thus I will never post on Facebook again.

Lest you think this is just a complicated revenge scheme against my mom (which, let's be clear, it is), it's this exact phenomenon that keeps driving Facebook's user engagement numbers down.

Far more than the fears about future employment, more than the creepy coworker who "likes" all your bikini pictures, it is the fear of awkward conversations with our relatives that keeps us from posting to Facebook.

This fear is also keeping Facebook from being interesting. We used to view Facebook for the exact same stuff that we are now told never to post; the "I'm so hung over" status messages, the "dancing on top of the bar" videos, and yes, the bikini photos.

By this point in Facebook's existence, everyone is very much aware that you need to be exceptionally careful of what you post on Facebook. The clear-cut solution for Facebook has been to get its privacy settings perfected in such a way that no one is ever hurt by using the website, but this ignores the fundamental question of why we are on Facebook to begin with . . . or at least why we used to be.

Discussions of Facebook's failure to monetize have been numerous. Their advertising models have been either ineffective or disturbingly Orwellian. And their new strategy of sponsored posts have only increased the fundamental problem: Most of us don't want to be there anymore, and no one will say exactly why. Instead, we get occasional stories about a general concept labeled "Facebook fatigue."

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Facebook will have the last laugh

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| By Michael Brush, MSN Money

The bad taste left by a bungled IPO and persistent myths of corporate weakness are keeping the social-networking giant's stock down. But a lot of experts see big gains ahead.

Facebook is back in the doghouse. Its stock is significantly lagging the market this year. Recently around $25.50, it's down 21.5% from its Jan. 28 high, compared with 3.4% gains for the Nasdaq during the same time.

But in all the other ways, Facebook (FB) is doing better than ever. The stock is weak for all the wrong reasons.

Which means Facebook -- and investors who buy at today's prices -- is going to have the last laugh. Here's why.

Big picture, a lot of investors avoid Facebook because of the bad reputation left by its bungled initial public offering. Simply put, it was priced way too high when it hit the market last May, amid excessive Wall Street hype and accompanying trading snafus. The dive from $38 a share to below $18 last fall cost traders lots of money.

We were all reminded of this last week by the news that the Nasdaq Composite Index ($COMPX) has to pay out millions related to those trading problems.

More recently, Facebook has been dogged by a half-dozen persistent and outlandish myths. As reality sets in and these myths go away, investors will buy the stock of the world's most popular social website. That should push the stock up more than 35% over the next year, to about $35. It could send it up fourfold over the next several years.

Michael Brush

"I think the stock's really attractive here," says Tom Vandeventer, portfolio manager of the Tocqueville Opportunity Fund (TOPPX). He made a similar call in my Sept. 18 column ("Are Facebook and its brethren buys?") during another phase of weakness in the stock. Then it was at $21.50, ahead of a move to $32.50. (It's fallen back since.)

JPMorgan Chase analyst Doug Anmuth predicts Facebook will turn into an "enduring, blue-chip company" as it continues to show investors it can convert its popularity into profits. Short term, he's got a $35 price target over the next 12 months.

Kevin Landis, portfolio manager of Firsthand Technology Value Fund (SVVC) thinks Facebook will grow to match Google (GOOG) in market value over the next several years, a move that would quadruple Facebook's stock price to $107.

Given how much people love to hate Facebook, these predictions might sound crazy. But not if you explode the six myths holding Facebook back. Let's blow 'em up one by one.

A big knock on Facebook is that it can't make the move to mobile, because cellphone screens are so small it's tough to run ads there. Fourth-quarter results blew this myth out of the water.

Mobile ad revenue shot up to 23% of overall ad revenue, from zero at the start of the year. And it advanced an impressive 50% over the third quarter, to hit $305 million out of $1.33 billion total ad revenue. One reason for this is that Facebook mobile ads actually get a higher click-through rate than desktop ads, says Vandeventer.

In short, 2012 was the "show me" year for Facebook mobile, and it showed us. "A lot of what we had to do last year was simply improve our mobile development process. Now we're there," CEO and founder Mark Zuckerberg said in the company's fourth-quarter conference call. "Today, there's no argument. Facebook is a mobile company."

Next up: Doing the same thing on Instagram, Facebook's popular photo-sharing service. Trust me, ads are arriving there soon, and sales growth will follow.

Ads run in Facebook's "news feed," the main content area showing updates, feel too much like spam, say Facebook skeptics like Jon Burgstone, a managing director of Symbol Capital, who teaches engineering at the University of California, Berkeley. So they alienate Facebook users. "Facebook still hasn't figured out advertising," says Burgstone.

One simple number blows this myth away: 41%. That's how much advertising revenue grew in the fourth quarter, to $1.33 billion.

"One of the big drivers of this has been that as we rolled out our ads to News Feed, we found that it barely affected the level of engagement on Facebook," says Zuckerberg.

Yes, but Facebook can't charge as much as Google for ads, because the ads are less effective, say the skeptics. True, Facebook does charge less, but the ads work. And that lower cost means the return on Facebook ads is higher than at Google, one marketing expert tells me. This no doubt helps explain the huge fourth-quarter revenue growth.

"With Google ads, you see sales increase, but the cost is so high the profit margin is lower," says Kenneth Wisnefski of WebiMax, an online marketing firm with about 500 clients. "At Facebook, the return on investment is higher because the cost is lower."

Facebook says independent studies by research companies like Nielsen, Aggregate Knowledge and Datalogix found its ads reach more people at a lower cost compared with "other online channels," no doubt a reference to Google, which targets ads on the basis of search history.

This makes sense, since Facebook knows so much about users. And rest assured that Facebook will keep figuring out ways to convert what it knows about you into marketing power for advertisers. And it'll be able to charge advertisers more, as a result. "That's the endgame here," says Vandeventer.

Facebook is trying new things here all the time. One example is "Custom Audiences," a service that helps advertisers match campaigns to user demographics. Another -- in the very early stages -- is "Graph Search," which lets some Facebook users search the "social graph," or the constellation of posts and contacts at the site, just as you might use Google to search online content. "This is one of the products that I'm the most excited about," says Zuckerberg.

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Facebook hits another low after downgrade

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The FMHR traders offer reasons why the market is fading despite Ben Bernanke's remarks at Jackson Hole. Meanwhile Facebook's price target gets cut to $15 from $25 at BMO. And Dennis Gartman, The Gartman Letter, offers insight on the commodities rally f...

Shares of Facebook are down again Friday, hitting a new all-time low after BMO Capital Markets cut its price target on the social networking company.

Facebook stock price was lately down 4.4 percent at $18.25. The social network’s share price hit a new low of $18.19 Friday, and is down 52 percent from its May 18 initial offering price of $38.

BMO Capital Markets noted that several lock-up expirations over the next year will weigh on Facebook’s stock price. BMO cut its price target by $10 to $15, and said Wall Street sentiment on Facebook is now much worse than advertiser sentiment.

"We expect investor attention to return to fundamentals after the technical challenges presented by lock-up expirations over the next six months have been absorbed by the stock," BMO analysts said in a research note.

Shares of game publisher Zynga, which derives most of its revenue from Facebook, slid 2 percent to just under $3 amid reports that executives Bill Mooney and Brian Birtwistle have left the company amid slowing sales and a weakening stock price.

Reuters contributed to this report.

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Knight OKs Nasdaq's $62 million Facebook payout

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Knight Capital Group said Thursday it will accept the Nasdaq stock market’s $62 million payback plan for companies that suffered losses on Facebook’s botched market debut in May.

The largest trader of U.S. shares by volume, Knight said it suffered losses far in excess of the Nasdaq’s proposed payout as a result of the confusion that surrounded the Facebook public stock offering.

Technical hiccups on the Nasdaq stock exchange on Facebook’s first day of trading led to a delayed opening for the stock and left investors wondering if their orders to buy or sell the social network’s stock went through.

Knight and several other market-making firms and brokerages said they lost a total of upwards of $500 million as a result of the trading glitch. Knight alone said it lost over $35 million.

Knight said it would rather see the Nasdaq cover all trading losses by its member firms, but supports Nasdaq's move to increase the payback fund to $62 million from an earlier offer of $40 million. Knight’s change of heart came in regulatory filing dated Aug. 29.

However, Knight said it rejects a stipulation that it must waive the right to sue the Nasdaq to receive compensation.

A trading error at Knight earlier this month cost the company $440 million and brought it to the brink of collapse. It avoided going out of business by clinching a deal worth $400 million with a group of investors.

Reuters contributed to this report.

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Facebook has can tanks share on the first day of early investors dump

9:30 AM early, Facebook, first, investors, share, tanks No Comments

Facebook's share price fell to an all-time low Thursday, as the first part of a so-called "hang" time for the most important investors in the company to an end.

The period lasted for 90 days after the social network of IPO on May 18, prevents that some early investors and insiders sell million shares that they own in Facebook.

These early investors include Accel Partners, a venture capital firm and Wall Street bank Goldman Sachs. Facebook insiders include members such as PayPal co-founder Peter Thiel and Reid Hoffman, founder of LinkedIn is.

Facebook's share price took a Thursday morning Rammender, although it is unclear whether the decline is to insider selling their shares or other shareholders sell on concerns that insiders could be unloaded their shares in the company. Everyone has to have seller take three working days to your sales report.

Lockup periods prevent insider sell their shares too close to a public offering, caused volatility in a stock.

More than 5 percent at $20, gefallener by 7.1 percent to an all-time low of $19.69 in trade in the morning until the afternoon trade Thursday was Facebook's share price. Facebook share price has lost 48% of its value since its debut in may in a $38 price.

Some early investors include 270 million shares for sale Thursday was available-more than half of the 421 million shares, the Facebook its initial public offering in may sold.

But on Thursday, end is only the beginning of a troubling time for Facebook shareholders.

This fall of 1.20 billion shares for sale, shares are flooding the market with Facebook as a second waiting for the stock end and may decrease the value of the shares of the company. The final lockup period ends IPO next may, a year after Facebook's.

Facebook has faced a difficult three months since the public offering which was one of the most expected IPOs in history.

The company suffered by botched public offer, marred by trading of glitches on the NASDAQ Stock Exchange. The share price has the price for the offer critics who say underwriting banks traded does not have $38 since his debut, leading too high and too many shares sold to the public.

Investors are also concerned about Facebook's ability to make money from its users, of which many now access the site from mobile devices where the company derives little advertising revenue.

Mark Hawtin, investment Director of GAM, a, made the bullish case for Facebook on CNBC Thursday, say Facebook find finally a way asset management firm, earning nearly 1 billion users.

"I have confidence in the company," he said:

Still, market generated much negative comment to StockTwits Thursday action for Facebook's stock, micro-blogging site has investors.

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Facebook shares fall to lowest since IPO

8:30 AM Facebook, lowest, Shares, since No Comments

Reports are Julia Boorstin, CNBC executives at Facebook on a shift to smartphones and the mobile world focus, but some investors are concerned about the strategy.

Facebook were shares by 15 percent to just under $23 in trading Friday after the company lack of financial forecast concerns about its mobile strategy reinforced the result quickly cash in the near future will burn.

The decline of moved the stock to its lowest price since the IPO in the middle of May.

The social network, which announced its first quarterly results as a public company on Thursday, managed to beat only sales expectations.

"It seems based on the aftermarket reaction to the result, that more than a flip wanted to investors," Piper Jaffray & co analysts said in a client note.

Investors who are worried, would have been money such as the social network of mobile advertising had also hoped that the company would signal that growth was picking up.

JPMorgan Securities analyst said that the stock could also come under pressure due to a lock-up expiring on 19 August when some early investors sell their shares flooding of the market with was can.

Reuters contributed to this report.

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Facebook posts loss in first quarter result report

12:30 AM Facebook, first, posts, quarter, Report, result No Comments

Kevork Djansezian / Getty Images

Facebook CEO Mark Zuckerberg said the company is focused on mobile, social show and the network development platform.

At 7 am ET updated: Facebook a loss reported Thursday in its first quarterly report as a joint-stock company, but sales rose from 32 per cent on the previous year levels to nearly $1.20 billion.

The results were about analyst expectations but Facebook shares (FB), already under severe pressure, decreased after release the result.

In a conference call with analysts, which was broadcast over the Internet, Facebook executives led by CEO Mark Zuckerberg said that they have worked hard to create new "social" advertising that the company make money the growing percentage of its users, to come to the service through mobile devices.

"An enormous opportunity for Facebook is mobile," said Zuckerberg.

"Our goal is everyone in the world," he said, adding that most people in the world will soon have a mobile device, so it makes sense to improve the mobile Facebook experience.

COO Sheryl Sandberg said the company has experimented with "sponsored stories" to pay the advertisers like Wal-Mart, to be sure, enable more users to display a particular piece of content in their news feed. She said that makes it possible to avoid the problem Facebook many media companies making money a hard time have the strategy with the small screen of mobile devices.

"Sponsored stories in the news are the cornerstone of our mobile advertising efforts", she said.

Zuckerberg said Facebook's opportunity to a platform for other developers build greater than generally understood.

He sketched out a future in which a new car buyers the car log on computer and immediately have access to contacts, music, restaurant, listings and the recommendation of friends would.

The social networking giant released a net loss of $157 million, or 8 cents per share, primarily by expenses in connection with its May 17 public offering. Without that of Facebook said that it earned 12 cents per share in line with Wall Street expectations.

Excluding share-based compensation and related personnel expenses tax said Facebook $515 million operating profit in the second quarter, compared with $477 million in the second quarter of 2011.

In the press release to Zuckerberg said that the company focused on "Mobile, platform and social show."

BTIG analyst Richard Greenfield said that investors were concerned that Facebook does not offer any evidence for his income going forward.

"Growth clearly slows down based on the user and revenue and without any commentary that people believe it is growing, have a large part of the investor fear," said he.

Facebook shares, which to regain even their $38 price fell $2.50 $26.84 before earnings were released, and by a further 10 percent in after-hours trading. Prior to the release Zynga, which accounts for more than 10 percent of sales of Facebook's Facebook were made due to the poor performance of result of of gaming company shares.

Michael Matousek, a senior trader at U.S. Global Investors Inc., Facebook said beating expectations, "but was the road looking for more."

"The big question which was how, it will earn its users billions or money," he said. "A lot people think you can convert these users not in money."

Facebook said that it had 955 million monthly active users, from 901 million users at the end of March. 84 Percent of its revenue or $992 million, generated from advertising.

The company has approximately 4,000 employees on the 30 June, up from 3,200 at the end of the year, a number that large user base was described as relatively Facebook's small.

Facebook was a massively hyped IPO, which widely as a failure, both due to technical mishaps and because the price of underwriters set could not keep, leaving legions of new, unfortunate investors.

CNBC's Julia Boorstin takes a look at Facebook's reported earnings in the last quarter.

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Nasdaq ups compensation plan for Facebook IPO

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The Nasdaq stock market plans to increase the amount of money it will offer to compensate clients affected by the problems with Facebook’s initial public offering in May.

The Nasdaq said Saturday it will pay a total of $62 million to companies that lost money due to Facebook’s botched stock market debut.

A first-day trading glitch marred Facebook’s IPO, leading to complaints of slow order confirmations and too many shares offered at too high a price.

Subsequent lawsuits alleged the Nasdaq botched the offering and that deal underwriters Morgan Stanley and others failed to share lowered earnings forecasts with retail investors before the IPO.

In early June, the Nasdaq said it will offer cash and rebates totaling approximately $40 million to compensate clients affected by the problems with Facebook’s IPO. The new program increases the amount offered by $22 million to $62 million. Market professionals will have to sign off on their right to take legal action against the exchange to collect the funds.

“We deeply regret the problems encountered during the initial public offering of Facebook,” Robert Greifeld, the Nasdaq’s CEO and president said in a statement.

“We failed to meet our own high standards based on our long history of providing outstanding technology to our members and exchange customers,” he added. “We have learned from this experience and we will continue to improve our trading platforms.”

The Nasdaq’s original compensation plan was criticized by market makers for being too small, and an increase of $20 million may fall short of appeasing some on Wall Street.

The top four market makers in the Facebook IPO -- UBS, Citigroup, Knight Capital, and Citadel Securities -- together lost upward of $115 million due to technical problems that prevented them from knowing for about two hours if their orders had gone through after Facebook shares began trading on May 18.

Last week Knight Capital Group, the largest trader of U.S. shares by volume, said its quarterly net income fell 81.3 percent in its most recent quarter, slammed by trading losses that resulted from the confusion that surrounded the Facebook IPO.

Thomas M. Joyce, Knight’s chairman and CEO, hinted that the company may still pursue legal action against the Nasdaq, saying in a statement Knight is “evaluating all legal rights and remedies in connection with the Facebook IPO.”

Reuters contributed to this report.

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Wall Street waits for Apple, Facebook earnings

6:30 PM Apple, earnings, Facebook, Street, waits No Comments

By Caroline Valetkevitch, Reuters
NEW YORK -- The trend of better-than-expected earnings will be put to the test in the coming week when investors hope Apple can exceed already high expectations for the tech giant and Facebook reports its first quarterly earnings.

Apple accounts for a significant proportion of the overall earnings of Standard & Poor's 500 components. S&P 500 earnings are expected to show a rise of 5.7 percent in the second quarter from a year ago. Excluding the maker of the iPad, the rise is 4.8 percent, according to Thomson Reuters data.

Apple's results, due Tuesday, could help stocks build on this week's gains and counter investor worries over the euro zone crisis. More signs of financial stress in Spain on Friday caused stocks to give back some of the week's increase. The S&P 500 ended 0.4 percent higher for the week.

"Apple can drive the whole (tech) group," said Daniel Morgan, who helps manage about $3.5 billion at Synovus Trust Company in Atlanta.

"There's a huge psychological component as it relates directly to Apple. If they just blast numbers like they did last quarter, then obviously the perception will be everybody else did pretty good and Apple did fabulous."

Apple's expected strong performance is mainly why technology earnings growth has held up better than other S&P 500 sectors. The expected growth rate for the sector has gone from 6.9 percent in April to 8.7 percent as of Friday, the data showed.

Apple's earnings for the quarter are seen at $10.38 a share, based on Thomson Reuters I/B/E/S, which includes estimates from 43 analysts. That compares with a profit of $7.79 a share for the year-ago quarter.

Morgan said Apple's growth has largely depended on the success of its new products. "For the stock, to continue its trajectory at the pace it has, it's critical that they release these new products," he said. Apple's shares are up 49.2 percent for the year so far.

Apple does not give any clues on its future products, but the California company is widely expected to release its next-generation iPhone later this year. Wall Street has also set its heart on Apple launching a new "mini iPad" and the long-awaited television set in the near future.

Investors are likely to be just as keen to hear from Facebook when it reports on Thursday. Facebook's first results following its market debut could give investors another chance to indicate how they feel about the stock since its disappointing initial public offering.

Shares of Facebook, one of the most closely watched IPOs ever, lost ground after technical problems with its market debut on Nasdaq and as investors questioned its ability to rapidly increase advertising revenue.

Analysts said an earnings miss by Facebook could be disastrous for the stock, which closed Friday at $28.76, below its $38 offering price.

Investors are looking for executives to address a litany of concerns about the business, such as the efficacy of its online ads and the company's nascent efforts in mobile advertising.

Tech results also will be closely watched for signs of weak demand overseas, particularly from Europe. Other technology companies expected to report next week include Texas Instruments and Amazon.com . Of the S&P sectors, technology has the highest sales exposure to Europe at about 25 percent, according to a Bank of America/Merrill Lynch research note.

Among the other 138 S&P 500 companies reporting earnings are Ford Motor Co , United Parcel Service and Whirlpool Corp .

While the majority of companies have beaten earnings expectations, revenue performance has been the worst for S&P 500 companies since the first quarter of 2009.

With results in from 116 companies, just 43 percent of companies are beating revenue expectations.

Sixty-seven percent of companies are beating earnings estimates, compared with a long-term average of 62 percent, Thomson Reuters data showed.

"With global growth slowing down, it's not surprising we're going to see some mixed numbers on the revenue side," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, whose firm manages about $13 billion in assets.

While earnings are expected to dominate stock investors' attention in the coming week, the euro zone crisis is still capable of taking the spotlight.

"It's the default thing for people to focus on," said Eric Kuby, chief investment officer at North Star Investment Management Corp. in Chicago.

Spain will tap the markets Tuesday when it sells three- and six-month bills. It will also sell three- and five-year bonds on August 2. Spain's 10-year bond yields hit a euro-era high of 7.3 percent on Friday.

The week's U.S. economic data includes the Markit U.S. Manufacturing Purchasing Managers Index for July, due on Tuesday. June's reading marked the lowest showing since December 2010.

CNBC's Amanda Drury looks back at companies that reported earnings this week and ahead to the big names slated to report next week.

Copyright 2011 Thomson Reuters.

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Shares go analysts wondering how deep Facebook

2:00 PM analysts, Facebook, Shares, wondering No Comments

Karen Bleier / AFP - AFP

An Apple iPhone shows the Facebook app splash screen on a PC screen.

Starting with its share price hit new lows daily, professional investors and market experts voice concern about the prospects for Facebook shares.

The number 1 social network share sank even lower Wednesday as nervous investors worried about the long term prospects of the company.

Facebook share decreased by 2.3 percent to a new closing low $28.19 after dropping nearly 10 percent Tuesday. The stock price, which has fallen in five of the eight days of public trade liked 26 percent now because public went to $38 per share may 17.

Facebook has seen fall the value of his stake in the company over $5 billion from the value of the IPO to $14.2 billion in current founder and CEO Mark Zuckerberg. Zuckerberg sold value of shares more than $1 billion to the IPO also according to documents filed by the companies.

The decline of Zuckerberg knocked off a short held place on Bloomberg running index 40 richest person in the world.

The offer, which was clouded by the trade in breakdowns and caused several lawsuits, already has one of the worst complete a large company, according to data Tracker Dealogic.

Anant Sundaram, a valuation expert at the Dartmouth Tuck School of business, said that he has Facebook review is concerned, because he thinks that the company difficulties his new users derive revenue, overseas and will be suspended from his growing presence on mobile devices.

About 20 percent is the current user of the company in the United States and Canada, and half of the users access the site with mobile devices, which directs Facebook of much less advertising revenue than through a desktop PC, he said. The mobile arena currently dominated Facebook rivals Google and Apple.

What's more, where Facebook at schnellsten--in Europe and Asia wachst-- markets companies less revenue. Facebook in $3 per user in the United States and Canada, but only $1.50 in Europe and Asia only 50 cent brings established Sundaram.

"You have a situation where U.S.-based PC users are for many of your revenue, but if you where the fastest, which is growing are where you make money with your user base problems accounting" Sundaram said.

Facebook's initial public offering of the company $ 100 billion geschatzt-- a number that says Sundaram 'problematic' sales by 30 to 35% annually for the next 10 years is because it would grow the company implies. Sundaram estimate that is a rating of 66 billion dollar rational for Facebook.

"This evaluation for the company that we would consider a share price, which 20 closer to the low to mid $s $40 per share," said Sundaram, which emphasises that he does not make to buy stock recommendations.

"The logic for this is I think the growth rate from 901 million users will be flat out," he said.

A course in the middle of $20 is a region where buyers and sellers of Facebook options, which began trading Tuesday for this summer are predictions.

According to the Wall Street Journal, some traders would use "put" options to set that Facebook share to $25 per share fall in mid-July.

Analysts have a wide range of price targets for Facebook's consisted of $30 to point to as high as $65, according to the newspaper.

Walter price, Portfolio Manager with RCM capital management, said CNBC Wednesday, that he thinks that the fair value for Facebook shares is about $30, added that he would buy it at this level.

He however notes that in addition to the challenge of money from mobile devices to Facebook-advertising for the majority of the revenue is dependent - it difficult can to attract and maintain large advertisers.

"Facebook is a transition in their business model," price told Reuters Insider. "It was easy to get the first 5 to 10 percent to try an advertising budget on Facebook and some brand advertising, but you have TV displace always the next 5 to 10 percent, and that is very difficult to do much."

He added "Facebook still not the metrics to prove to prove profitability and growth and awareness of their platform".

Days before Facebook's debut, General Motors announced it attracted unproven track record and concern about the lack of paid advertising on the social Web, relying on Facebook prove that advertising on Facebook is strongly back.

Facebook the next steps in the growing mobile arena can give some investors pause.

S & P Capital IQ equity analyst Scott Kessler said on Tuesday, that he has a price target of $30 for Facebook in the next 12 months relying on Facebook to acquire still emerging strategy to income in the mobile space.

S & P pointed to reports this week that searches Facebook, to both Opera buy software browser company and build a Smartphone, pointing out that a hard time making money have the company without proprietary mobile software and hardware.

"We think is not proactively at an interesting time [Facebook] more on mobile phones before their competitive positioning may affect but also aggressive affect their profitability can", Kessler said.

Reuters contributed to this report.

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Facebook has its eyes on Face.com, reports say

6:30 AM Facebook, Facecom, reports No Comments

There's nothing like an acquisition to distract investors from your falling stock price.

Reports in the tech press Tuesday said that Facebook, whose stock is still reeling from the aftershocks of a bungled IPO, is looking to acquire Israel-based face recognition technology company Face.com for around $80 million to $100 million.

The Los Angeles Times reported that rumors of the deal for the startup surfaced in the Israeli press and then were quickly picked up by tech reporters. Several of the reports said that when they contacted Face.com CEO Gil Hirsch, he responded by saying he had no news to share.

Shares of Facebook (FB) were down about 7 percent on Tuesday to just below $30 on a day when most market indices were higher. It was the first time since Facebook's debut on May 18 that its shares dipped below $30, putting the shares about 21 percent below the IPO price of $38 a share. It was also the first time that Facebook options began trading.

Facebook options began trading today on a bearish note. What does this indicate about the stock's future? The FMHR traders weigh in with the play.

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Facebook investors could recoup losses in court

6:00 AM could, court, Facebook, investors, losses, recoup No Comments

CNBC's Jane Wells talks to people in Silicon Valley to get their take on Facebook's IPO and its impact on future IPOs.

Retail investors with dreams of instant wealth who bought Facebook shares on opening day may have been disappointed, but they could still wind up with a windfall if lawyers seeking class-action status for lawsuits against the company and its IPO underwriters get their way.

A pair of lawsuits filed in New York and California allege that retail investors were harmed when material information about the company's finances weren't disclosed to them.

Experts in securities law have said whether or not plaintiffs will be able to recoup their trading floor losses in a courtroom will depend on the fine print of securities regulations. What Facebook and its underwriters, including primary underwriter Morgan Stanley, which declined to comment on the suits, knew, and when and to whom they provided information, are the issues on which both lawyers and regulators are focusing.

"It sounds like this is where that case is going to be one of the battlefields," said David Buckner, a partner at law firm Grossman Roth P.A., whose expertise is in class action suits and securities litigation. "Who has an obligation to speak to who — that's something that will end up being important."

Following a Congressional hearing on Tuesday, Securities and Exchange Commission chair Mary Schapiro said, "I think there is a lot of reason to have confidence in our markets and in the integrity of how they operate, but there are issues that we need to look at specifically with respect to Facebook."

Facebook did warn would-be investors of potential challenges to its revenue stream triggered by an increase in mobile users and Facebook's still-poor ability to monetize its mobile base. In an uncharacteristic amendment to its S.E.C. filing just over a week before its IPO, the company warned that these factors had the ability to hurt profits.

Investors who feel burned and are pursuing legal action contend that the company's cautionary statements weren't specific enough, that Facebook knew that this issue was having more of a negative impact than it let on in the filing, and it tipped its hand only to its underwriters and a handful of analysts.

"The real issue is how adequate a warning was the May 9 registration statement language," said Merritt B. Fox, law professor at Columbia University. "Without knowing the facts, it's hard to know if what the analysts were doing was simply interpreting information that was in the May 9 statement or whether they had additional information to suggest that things were worse."

The Wall Street Journal cited unnamed sources saying Facebook executives contacted nearly two dozen analysts following that amendment and let them ask questions about it. The lawsuits assert that this communication amounted to material information which Facebook, which has said it will defend itself "vigorously," was legally obligated to share with all investors.

"It wasn't the prospect" of future losses, said David Rosenfeld, an attorney at Robbins Geller Rudman & Dowd, a law firm representing plaintiffs in a suit filed in U.S. District Court in Manhattan on Wednesday. "They already knew… and they told their underwriters," he said.

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Barron's: Facebook shares could fall below IPO price

1:00 PM Barrons, below, could, Facebook, Price, Shares No Comments

Shares of, social media company Facebook Inc. could fall below the IPO price of $38, Barron's wrote in its may issue.

Facebook saw their stocks rise a little 0.6 per cent to $38.23 on Friday in the first day of trade.

The camp remained on the $38 IPO price, supported in the market by offering underwriters. But Barron said the "big question" this week will be whether they continue to do.

Its shares still look expensive as compared with rivals such as Google Inc, and all the more so given Facebook's challenges in the creation of revenue from mobile users, wrote that financial per week.

Facebook shares face also the view to pressure from heavy selling shares by the end of 2012, when the early and inward investors to get rid of the shares before a possible increase in the capital gains tax, according to Barron's.

Below, Andrew Rachleff Wealthfront President & CEO, and David Callahan demos, discuss Facebook's effects on the economy on CNBC.

Copyright 2011 Thomson Reuters.

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NASDAQ "embarrassing" via Facebook delay

11:00 PM delay, embarrassing, Facebook, NASDAQ No Comments

The CEO of the NASDAQ Exchange says it "is humbly embarrassing" his botched Facebook's eagerly awaited debut as a joint-stock company on Friday.

Robert Greifeld said there are media no signs the delay the underwhelming performance of Facebook's helped Commons, which at $38.23 end - 23 cents above where it started.

Expected to start share Facebook but not open at 11 A.m. until 11: 32, and some investors learn not for hours, if their business was going through.

Greifeld called "successful" the first day of trading the company. He said end of order cancellations caused an error, according to reports published Sunday. He said the NASDAQ Board Saturday met and plans of his auction IPO process to change.

The Securities and Exchange Commission has said that it examined.



© 2011 The associated press. All rights reserved. This material cannot be published, sent, rewritten or redistributed.

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Facebook stocks trim gains after early pop

5:30 PM after, early, Facebook, gains, stocks No Comments

Facebook on EPA

Facebook CEO Mark Zuckerberg Rings NASDAQ Opening Bell from Menlo Park, California

Updated at 16: 00 ET: after more than 10 percent at the start of trading, shares of Facebook jump back undressed in their market debut Friday, proposes a cooler than expected reception for one who observed the most initial public offerings of stock of the last years.

Facebook share jumped to $43 in the first trade, about 13 percent from an IPO price of $37. But the stock was soon some his first jump and fell as low as $38 in the first half-hour of trading, at the point of IPO underwriters was its price, support, according to reports. Facebook shares eventually closed at just over $38.

The broader stock market was lower Friday, with social media among biggest losers of the day. Shares of LinkedIn, Pandora, and GroupOn were all lower.

Facebook's opening delayed trade. Shares due to originally begin trading on the NASDAQ Stock Exchange at 11 A.m. ET, was but by about 30 minutes as an experienced trader problems with change and cancel reports of orders, that they had sent to the NASDAQ, the Wall Street Journal.

Despite the technical difficulties, retail was very strong demand for the Facebook offering, dealers said CNBC component of 15 to 25 percent with an expected retail. Trading volume in Facebook 100 million shares in the first three minutes of trading the camp exceeded, the magazine said.

Facebook's market reception was unusual. Others have seen the last large Internet IPOs strong starts, including LinkedIn, which went public almost exactly one year at $45 per share before and at $94 on a volatile day of trading above saw their shares closed $122 at one point.

Related: Want a piece of Facebook? Here is what you need to know

This means that investors, could get luck to the tender offer price book an immediate paper profit of more than 100 percent, or "mirror" shares and cash. Other investors were numbers as much as $122 per share for LinkedIn on this day and with paper losses. (LinkedIn shares currently trading for about $100.)

GroupOn, another the last Internet IPO, jumped 27 percent on the day of its opening.

Facebook CEO Mark Zuckerberg reminds staff that the company aims to make the world more open and connected. Then he rings the opening bell.

Earlier Friday, Facebook rang founder and CEO Mark Zuckerberg the opening bell for the NASDAQ stock market in Facebook shares of Facebook are based in Menlo Park, California now trading on the NASDAQ under the symbol "Department." (You can track the performance of Facebook share price here).

Facebook went after the close of trading Thursday at $38 per share, a landmark increase more than 100 billion $ $16 billion initial public offering, the company values.

Investment banks, the Organization has set the price range at the upper end of the range of $34 to $38 per share estimated by Facebook in a regulatory filing earlier this week.

The offer values at $38 per share the eight-year-old company $104 billion initial public offering of the greatest debut has market for an Internet company. There are more than $16 billion for Facebook and selling shareholders, including Zuckerberg, ultimately could be raised and up to $18.4 billion, assuming that the underwriters exercise their option for "Overallotments" to strong demand.

Related: Facebook founder Zuckerberg opens trading on NASDAQ

Zuckerberg updated his profile on Facebook Friday morning, with his company on the NASDAQ market.

Facebook has enjoyed a remarkably rapid growth. In just eight years, the company from a college service in a Harvard dorm has founded to the third largest public offer of shares of in U.S. history, after has gone offers from General Motors, and visa.

The sky high rating of Facebook, puts it a bit before the Web veteran Amazon.com, which is more than 10 times Facebook has sales of $3.7 billion. But Facebook is growing fast and posted $1 billion US$ 631 million profit last year more than Amazon's.

Associated press contributed to this report.

Facebook is the much-hyped debut on Wall Street Friday morning, and it is shaping up to one of the largest IPOs ever, with analysts predicting that the social network is estimated at more than $100 billion. Today Savannah Guthrie raises a look whether it does justice to the stock to the hype.

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How Facebook is friendly to its employees

1:00 PM employees, Facebook, friendly No Comments

CNBC's Carl Quintanilla and Julia Boorstin discuss the many "perks" Facebook offers its employees, including three meals a day, free dry cleaning, and multiple bars with beer on tap.

If you just bought shares in Facebook or are considering doing so, you probably want to know what the company is doing to keep its employees happy.

At its new headquarters in Silicon Valley, CNBC reports that the social media giant goes beyond just free food and on-site drycleaning (that's so Google).

Facebook employees also can use a treadmill while taking conference calls, walk or bike the faux streets of the complex, get a beer on tap and write something on a literal Facebook wall.

Employees also apparently named the conference rooms, which gives you an insight into the geekdom at work here. Got a meeting? Put on your hoodie and head down to Jar Jar Drinks or Mai Tai Fighter.

Do the employee perks at your office compare to the ones at Facebook HQ? Tell us in the comments section below.

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Here's how you get a piece of Facebook

12:00 PM Facebook, Heres, piece No Comments

Facebook will make its much-hyped debut on Wall Street Friday morning, and it's shaping up to be one of the largest IPOs ever, with analysts predicting the social network will be valued at more than $100 billion. TODAY's Savannah Guthrie takes a look at whether the stock will live up to the hype.

Excitement for Facebook’s debut on the financial markets is high. So if you’re an individual investor, can you get a piece of the action, and should you?

The first thing to remember about IPOs is that they are not normally geared toward individual investors. Underwriting banks typically allocate IPO shares to their best clients, which include hedge funds, wealthy individuals and large institutional investors. These investors will get the right to buy a certain number of shares at the offering price, which Facebook set at $38 per share Thursday afternoon. (You can track the performance of Facebook’s stock price here).

Some smaller retail investors may get a few shares allocated, especially if they have a good relationship with a broker for one of the dozens of underwriting firms handling the transaction.

If you have not already been in touch with your broker, however, it is too late to even try get in at the offering price. The deadline to express interest was Tuesday afternoon at brokerages we checked with, and the deal reportedly is oversubscribed.

Your only option is to buy shares after they begin trading on the Nasdaq stock market, when the price will be set by the law of supply and demand.

“This is not a strategy for the faint of heart,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y. Intense interest in Facebook’s offering is likely to drive the price up sharply as soon as trading begins, meaning the first public trade could be well above the offering price.

Related: Facebook set for stock market debut

In an example of the type of pressure investors could face, LinkedIn, another social media company, went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.

That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $103.)

Facebook could easily see a similar first-day trajectory, but it is impossible to know. Online investors who place a general order for Facebook stock will get shares at whatever price happens to be prevailing at the moment.

“Is it a sound investment for a sensible portfolio? No," said Johnson. "Is it a worthwhile speculative investment? Sure, but you have to be fully prepared for something that could be a very emotional event. And I have the sense that [the IPO price] could be very overvalued.”

One good piece of news about Facebook’s IPO is there are plenty of shares up for grabs.

In a sign of intense investor interest, Facebook said early investors in the company will be selling more of their shares in the IPO, bringing the total number of shares available to as many as 421.2 million, up from a previous maximum of 337.4 million.

Still, despite the increased number of shares on offer, the hype and interest surrounding Facebook’s IPO are precisely why investors should be cautious about investing in the company, said Professor Anant Sundaram of the Tuck School of Business at Dartmouth.

“My concern is the market is pricing [Facebook] to perfection … and the kind of fundamentals that are premised in that valuation, growth and revenues and cash flows, are simply astronomical,” he told CNBC Wednesday. “Now it’s possible they could achieve that, but I think the probability is low.”

Sundaram also says the fact that founder Mark Zuckerberg will control more than 50 percent of the company’s voting rights after it goes public is “very, very troubling.”

While a handful of new technology companies, such as Google, have thrived under the tight control of their founders, the stock ownership structure at Facebook limits the ability of shareholders to take action if things go wrong. He said evidence shows tightly controlled companies are more likely to wasteful acquisitions, overpay employees and spend unnecessarily on capital expenditures.

Other technology companies, such as Microsoft and Apple, have fared well without that sort of governance structure, Sundaram said.

“Basically, as investors we are being asked to liquefy and validate a lot of insider wealth, and being told to sit and zip your lips in the peanut gallery,” he said.

While Facebook is expected to get a big opening-day “pop,” Kathleen Shelton Smith, co-founder and chairman of IPO research company Renaissance Capital says it’s more important to track what Facebook’s stock price will be a week or a month after its initial trading day.

“For an IPO to work it has to trade higher over time after the initial trading day, and not all of them do,” said Smith. “So the challenge for the underwriters is to price the IPO where it can move higher over time.”

CNBC's Kayla Tausche reports Facebook's IPO is expected to be priced in the $34 to $38 range after the market closes today.

“The question is, over time will the company deliver the kind of performance that justifies its price? Every investor studying this company wants to work that out.”

For individual investors, it is worth remembering that Facebook shares will be available on Nasdaq for the foreseeable future. Would-be investors can wait a day or two and buy shares when the price is less volatile.

For investors interested in IPOs, but unable to purchase them directly, Smith suggests investing in a mutual fund that track the IPO market, such as the Direxion Long/Short Global IPO Fund (ticker: DXIIX) or the Renaissance Global IPO Plus Aftermarket Fund (ticker: IPOSX).

Investing in these funds might even be a smarter play than buying Facebook shares directly. Sundaram said there are many reasons to expect Facebook shares to fall after their opening day.

He pointed to similar technology companies such as Zynga, which have seen their share prices fall after the expiration of "lockups" that prevent company insiders and major investors from selling for at least 90 days after a stock is first publicly traded.

If Facebook shares manage to hold their value “that would be a remarkable achievement in my book,” he said.

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Mr. IPO: Facebook could be a dangerous bet

6:00 AM could, dangerous, Facebook No Comments

Jay Ritter, University of Florida professor, discusses whether Facebook's IPO is overpriced and what kind of returns investors could expect from the upcoming stock.

When a world-renowned expert on initial public offerings has reservations about the upcoming Facebook IPO, it’s worth sitting up and taking notice.

Jay Ritter, Cordell Professor of Finance at the College of Business Administration at the University of Florida, appeared on CNBC Thursday morning to discuss his views on Friday’s much-anticipated stock offering from the social network.

“My concern with Facebook is that at the valuation that public market investors are going to be buying in at there’s very little upside potential left,” he told CNBC.

But, he added, it doesn’t necessarily follow that Facebook is overvalued.

“The bullish case for Facebook is, as Google has demonstrated, targeted search can be an extremely profitable business, and Facebook has that franchise with social networks and it’s a very defensible business model,” Ritter said.

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Growing shift mobile threat to Facebook

10:00 PM Facebook, growing, mobile, shift, threat No Comments

Facebook said Wednesday that use its social networking service is growing faster than the number of deliveries display reflects a shift towards mobile devices and away from the computer.

In a Amedment to its registration for an expected initial public offering this month, said Facebook daily average values users increased faster than the show in the first quarter, and this trend has continued in the current quarter.

The increasing use of Facebook on mobile phone is a risk factor for investors, because Facebook so effectively could earn money not mobile applications such as desktop use of the site.

The modified application came after senior executives, including founder and CEO Mark Zuckerberg with investors to promote offers of shares in a so-called "road show". The additions were probably in answer to questions from investors.

Facebook could go public as soon as 17 with the offer, which would be a record for any technology company. Facebook and its shareholders are expected to up to sell $13.6 billion in stock in a deal that could be the company up to $96 billion in value.

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