Facebook's stock endured a roller coaster ride, initially surging in after hours trading after the social media giant smashed expectations with its latest quarterly figures but then swiftly shedding its gains when it emerged that the company might be losing the interest of some teenage users, an important demographic.
The figures, issued after US markets closed, showed that revenues had spiralled from $1.26bn in the third quarter of 2012 to just over $2bn in the quarter to the end of September this year. Total advertising revenues stood at $1.8bn, up 66 per cent compared to the same period last year. Crucially for investors, who have been keeping a close eye on Facebook's ability to make money from mobile devices, the company said mobile advertising represented around 49 per cent of the total figure.
Analysts had been expecting the company to post overall quarterly revenues of around $1.9bn.
“The strong results we achieved this quarter show that we're prepared for the next phase of our company,” Facebook co-founder and chief executive Mark Zuckerberg said as the company's stock, which was slightly lower when the stock market closed in the US, spiked in after-hours trading, rising by over 15 per cent at one point as investors welcomed the strong figures.
But the rally faltered after the company's finance chief, David Ebersman, admitted in a later call with analysts that there was a decrease in daily users who were in their teens, particularly in their early teens. Although he added that overall usage among US teenage users was stable, the admission triggered a reversal in the share price, which went on to lose all of its after-hours gains as investors worried about the social media giant's ability to keep attracting new users.