Why Facebook Fell to New Lows

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of social networker Facebook (NAS: FB) have fallen by as much as 17% today to hit new lows after the company reported second-quarter earnings.

So what: Total revenue rose to $1.18 billion, which resulted in a GAAP net loss of $157 million, or $0.08 per share. Most of this was due to stock-based compensation expenses related to the IPO, and on an adjusted basis, Facebook posted a non-GAAP profit of $0.12.

Now what: The company has now reached a total of 955 million monthly active users, with growth international user additions. Ad revenue was $992 million, and payments revenue was $192 million. Worldwide average revenue per user increased to $1.28, slightly better than a year ago. Investors were a bit nervous about the lack of financial guidance for the coming quarter or the full year and continue to question whether Facebook is worth its lofty valuation.

Interested in more info on Facebook? Add it to your watchlist byclicking here.

The article Why Facebook Fell to New Lows originally appeared on Fool.com.

Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Facebook.Motley Fool newsletter serviceshave recommended buying shares of Facebook. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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