Facebook--The Day After

Now that Facebook (NASDAQ: FB) has issued its quarterly report and its stock has fallen another 10%, investors wonder how low the shares can go. Revenue last quarter rose to $1.184 billion from $895 million in the same quarter a year ago. But Facebook had a GAAP loss of $157 million compared to a $240 million profits in second-quarter 2011. Fortunately, Facebook has more than $10 billion in the bank. Its market cap is down to around $65 billion, based on a stock price that has fallen from a post IPO high of $45 to under $24 in the aftermarket yesterday. Other than broker downgrades, Facebook likely has until its next quarterly report to raise the market’s perception of its prospects. That means shares may trade in a narrow range between $25 and $30. The nagging issues that will not have a publicly disclosed resolution until three months from now are whether Facebook can grow much beyond one billion users, whether it can sell advertising to huge marketers in large dollar increments and whether its mobile platform can draw much revenue at all.