Social networking giant, Facebook Inc. (NASDAQ: FB) held its first annual general meeting on Tuesday; and as expected its CEO Mark Zuckerberg had to face investors’ wrath. Most Facebook shareholders are not happy with the Stock’s disappointing performance thus far.
Facebook, which made its IPO at $38 a share in May, last year, saw its stock tumble nearly 40% since then. This is because; investors are little skeptical whether the social networking giant, which showed lots of potential at the time of its IPO, poses enough drive, ideas and the ability to make money consistently.
Although, Facebook’s revenue from mobile business showed sharp increase in the fiscal first quarter, investors concern is how the company will add value in the future, given the fact that the industry is fast evolving.
Facebook’s revenue growth is nowhere near then what it used to be, two years back; besides, new mobile apps are also gaining popularity, especially among teenagers, fanning fears that Facebook might lose traction amid increasing competition.
Not surprisingly, Zuckerberg was expecting bombardment of some tough questions from investors. Before taking questions from shareholders, Zuckerberg tried to pacify investors by acknowledging “We’re disappointed with the performance of the stock over the last year.”
“We expect there’s going to be fluctuations,” added Zuckerberg.
However, the 29 year old co-founder and CEO defended Facebook’s business model, including many of its recent decisions like modifications made in its mobile apps and latest ad products. Zuckerberg pointed out that there were signs of improvement across Facebook’s business, adding that nearly 30% of total revenue is now generated from mobile ads.
While concluding his speech, Zuckerberg said that wide fluctuations in the stock price did not deter him to chart out a roadmap for Facebook. “Nothing in that has made me think that the fundamental strategy is wrong,” said Zuckerberg.
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