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Facebook shares soar as results beat expectations as number of users grows to 1.65 billion | |
(about 4 hours later) | |
Facebook has beaten expectations for its first quarter pushed by its robust mobile advertising business and a growing number of users. | Facebook has beaten expectations for its first quarter pushed by its robust mobile advertising business and a growing number of users. |
The social network on Wednesday reported earnings of $1.51 billion (£1bn) up from $512 million in the same period a year earlier. Facebook’s user rank grew to 1.65 billion from 1.44 billion in the first quarter last year. | The social network on Wednesday reported earnings of $1.51 billion (£1bn) up from $512 million in the same period a year earlier. Facebook’s user rank grew to 1.65 billion from 1.44 billion in the first quarter last year. |
The stronger than expected results drove the company’s shares to 9.5 per cent in after-hours trading to $118.39 setting it on track to open at a new high on Thursday, at nearly triple its initial public offering four years ago. | The stronger than expected results drove the company’s shares to 9.5 per cent in after-hours trading to $118.39 setting it on track to open at a new high on Thursday, at nearly triple its initial public offering four years ago. |
This comes a day after Apple and Twitter have both disappointed investors with Apple shares falling 7 per cent on Wednesday. | This comes a day after Apple and Twitter have both disappointed investors with Apple shares falling 7 per cent on Wednesday. |
Daniel Morgan, senior portfolio manager at Synovus Trust Company which owns $40 million of Facebook shares said it was “by far the best number” he had seen in technology. | Daniel Morgan, senior portfolio manager at Synovus Trust Company which owns $40 million of Facebook shares said it was “by far the best number” he had seen in technology. |
Sales for the quarter reached $5.3 billion up from $3.5 billion last year. Mobile ad revenue accounted for about 82 per cent of total ad revenue compared with about 73 per cent a year earlier. | Sales for the quarter reached $5.3 billion up from $3.5 billion last year. Mobile ad revenue accounted for about 82 per cent of total ad revenue compared with about 73 per cent a year earlier. |
Mark Zuckerberg, Facebook’s CEO, said users now spend more than 50 minutes a day across its suite of app, excluding WhatsApp. | Mark Zuckerberg, Facebook’s CEO, said users now spend more than 50 minutes a day across its suite of app, excluding WhatsApp. |
Zuckerberg seized the opportunity to propose a new class nonvoting stock to make sure that he retains the major control of his company. The new class of C shares would have the same economic rights as other shares but wouldn’t have voting rights. | Zuckerberg seized the opportunity to propose a new class nonvoting stock to make sure that he retains the major control of his company. The new class of C shares would have the same economic rights as other shares but wouldn’t have voting rights. |
This means that Facebook will be allowed to distribute them to employees and acquisitions without diluting Zuckerberg’s control of the company. | This means that Facebook will be allowed to distribute them to employees and acquisitions without diluting Zuckerberg’s control of the company. |
Shareholders are scheduled to vote on the proposal at the company’s annual meeting on June 20. | Shareholders are scheduled to vote on the proposal at the company’s annual meeting on June 20. |
Investors said they were not concerned that Zuckerberg would have increasing control because of the company consistent ability to grow and exceed expectations. | Investors said they were not concerned that Zuckerberg would have increasing control because of the company consistent ability to grow and exceed expectations. |
“I honestly don’t think that anyone cares if he has more power, since he’s done everything right since they went public,” said Michael Patcher, Wedbush Securities analyst. | “I honestly don’t think that anyone cares if he has more power, since he’s done everything right since they went public,” said Michael Patcher, Wedbush Securities analyst. |
Facebook’s founder has pledge to give away 99 per cent of his Facebook shares away in his lifetime in December, with the value of his remaining 1 per cent expected to grow. | Facebook’s founder has pledge to give away 99 per cent of his Facebook shares away in his lifetime in December, with the value of his remaining 1 per cent expected to grow. |
(Additonal reporting by Reuters) | (Additonal reporting by Reuters) |
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