SAN FRANCISCO (Reuters) – Facebook Inc faces immense pressure to beat Wall Street’s financial targets when its delivers its inaugural quarterly earnings report next week, hoping to wash away the bad taste left with investors from a soured IPO.
The No. 1 social networking company’s second-quarter report on July 26 will be scrutinized by investors looking for clues on the health of its business, which is experiencing a sharp slowdown in revenue growth and mounting questions about its advertising sales.
With a rich multiple that gave Facebook the distinction of being the first U.S. company to go public with a valuation of more than $100 billion, the company headed by 28-year-old Mark Zuckerberg has little room for error.
“If they miss, it would be catastrophic for the stock,” said Michael Binger, a portfolio manager with Gradient Investments.
“This is a very important earnings quarter for them. It will establish in people’s minds how they think of the company,” said Binger, whose firm does have a position in Facebook.
No comments:
Post a Comment