Facebook Inc (FB)’s Shares Decline 8% After Announcing Aggressive Spending In 2015

Facebook Inc (NASDAQ:FB) lost 8.20% share price in afterhours trading post announcing its third quarter 2014 results closing at $74.15. The social network announced an aggressive spending plan for its latest acquisitions and projects leading to the decline.

The world’s largest social media network announced its third quarter 2014 results with an impressive increase of 59% in its quarterly revenue at $3.20 billion as compared to the same quarter last year. Further, the company registered 19% increase in its daily active users at 864 million and 1.35 billion monthly active users during the quarter.

Despite of the impressive quarterly results, some of its latest acquisitions including WhatsApp and Oculus are not very well received by its investors. On top of that, the social network’s plan to invest aggressively in these acquisitions could further stir investor support. Another announcement made by Dave Wehner, CFO, indicated an increase of 55 to 75 percent in the spending of Facebook Inc (NASDAQ:FB) during the next fiscal.

Facebook (FB)

Richard Greenfield, BTIG analyst, said,

“Giving expense guidance without giving revenue guidance is frustrating and spooking The Street.”

Trade-Ideas LLC identified Facebook shares lagging behind in the post-market trading considering its average dollar volume of $3.4 billion and decline in its share prices.

Earlier, Ad Week complied a report indicating that the Video Advert feature of Facebook Inc (NASDAQ:FB) is gaining popularity among brands. Another report from Socialbreaker indicated a shift in video posting preference of mega-brands like McDonald’s Corporation (NYSE:MCD). In January 2014, the restaurant chain posted 27 videos to Facebook out of which 18 were YouTube links. On the contrary, McDonald’s Corporation (NYSE:MCD) posted 32 videos on Facebook out of which 19 were posted using its video feature beating YouTube.

Facebook is quite careful about its ad revenue and video advertising is the current target of the social media giant. Unlike its rivals, Facebook Inc (NASDAQ:FB) has tasted success with its latest attempts to find new revenue streams.

This article has been written by Prakash Pandey.

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