Facebook posted an increase in Q2 revenue of 32% to $1.18 billion, beating analysts’ expectations of $1.15 billion, however posted a quarterly net loss of $157 million and a net profit of 12 cents a share. Advertising revenue beat estimates by $1 million, coming in at $922 million. Investors and analysts are skeptical of the social media giant’s business model in that they do not have effective ways of monetizing their average of 552 active daily users. In my opinion, facebook is valuable and the collapse in stock price in such a short amount of time must have been to poor price projection by their underwriters.
David Cornes holds a degree in economics from the University of Montana.