NEW YORK — Facebook shares took a beating Friday as markets opened following the first earnings report since the much-hyped public offering of the world’s biggest social network.
In early trade, Facebook shares plunged 14.9 percent to $22.84, worse than the declines seen in after-market trade Thursday.
Facebook reported a loss of $157 million in the second quarter, largely because of accounting rules requiring it to set aside reserves for stock compensation. Excluding that, the results were largely in line with estimates, with a profit from operations of $515 million on $1.18 billion in revenues.
But analysts said the social media space is under pressure and that Facebook would need to show more spectacular gains to justify its stock market value.
Victor Anthony at Topeka Capital Markets said the results were largely in line with expectations “but the market wanted more.”
“We believe guidance would have helped stabilize the share price but ultimately some patience will be needed as this growth story builds,” he said in a note to clients.
Trip Chowdhry at Global Equities Research said the results confirmed his view that the public offering in May was poorly priced.
“Remain in the sidelines, IPO was totally mispriced and engagement levels on Facebook are not yet stable,” he said in note.
Facebook, which made a market splash in May, said that excluding special items, its results for the second quarter showed a profit of 12 cents a share, in line with most forecasts, as revenue rose to $1.18 billion, a bit above market estimates.
The results showed growth for Facebook in overall revenue, operating profits and the number of users — which grew to 955 million by the end of the quarter.
Revenue for the second quarter totaled $1.18 billion, an increase of 32 percent from the same period a year ago.
Advertising revenue — 84 percent of the total — was $992 million, up 28 percent.