Facebook has published its first quarter-to-quarter revenue in two years and analysts think this move could be interpreted as a preparation for the upcoming IPO. Although the company has been through a small decline at the beginning of the year, Mark Zuckerberg thinks the situation will be better once the company goes public.
It was about time for the social network to reveal its financial situation, especially since the company is preparing to get public. Figures show that Facebook’s growth cooled down at the beginning of the year, but executives claim investors have no reasons to worry about it. According to them, the small decline was determined by the seasonal advertising trends.
Brian Wieser, from Pivotal Research Group, is of a different opinion. He told reporters at Reuters that he was very surprised by the fast slowdown registered by the social network. He explained that investors have every right to feel worried about the decline because the company has always been perceived as a rapidly growing one. The concern is even more worrisome as investors have been confronted only with lofty valuations, so far.
Facebook expects to raise at least $5 billion in the initial public offering that might increase the network’s value to $100 billion. Jeff Sica, chief investment officer of SICA Wealth Management, stated that Zuckerberg’s company is going to have a hard time meeting the market’s expectations. This is, in his opinion, the aspect that Facebook should focus upon in the following months, so people’s perception of the IPO would not be negatively influenced.
Despite these predictions, many investors declared themselves interested in signing up for the initial public offering. The first-quarter figures will, however, prevent investors from keeping their stock over a long period of time.
Facebook tried to calm investors down by telling them that it is absolutely normal for revenues to be slightly smaller in the first three months of the year. They claim that this tendency was usually masked until now by the rapid advertising growth, but it will become more visible in the future, once the growth pace slows down.