Published on : Oct 29, 2014
Facebook has announced on Tuesday that it is prepping for a dramatic rise in spending in the year 2015. This warning has come combined with a projected slowdown in the company’s revenues after revenues were analyzed at the end of the third quarter of the year.
The plans of such hefty spending in the next financial year by the company are indicative of stress in the investor support accorded with huge strength over the past year. While Facebook has continued to receive increasingly growing revenues from its mobile advertising division, it has also been laid-back to certain levels by the investors in regards with its costly acquisitions, worth many billion dollars, of firms such as Oculus and WhatsApp.
Shares of Facebook had reached of $81.16 on Tuesday, an all-time high feat for the company, before the company had declared its third-quarter financial results.
Facebook’s CFO Dave Wehner stated analysts that the company is expecting a 55% to 75% rise in company’s expenses the next year when the company plans to invest in pricey ventures such as WhatsApp and oculus which have not yet started showing profits.
This is a big shift from the company’s usual spending patterns, with costs and expenses in the first three quarters of 2013 being upto 32%. Facebook has not backed its hint at increasing expenses with its expected pace of revenue growth, adding further more to investor worries.
Analysts have shown concerns about the way Facebook has only come upon with expense guidance and not its revenue guidance for the forthcoming year. How investors respond to company’s move is yet to see.