Here's The Deck Facebook Showed Wall Street Before Its Stock Crashed

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Photo: Striatic / Flickr, CC.

When Facebook held its Q2 2012 conference call with Wall Street analysts on July 26, CEO Mark Zuckerberg and his team showed them this deck of slides on the company’s’ business.At the time the stock stood at $26.85—down from its highs, but not drastically so.

Facebook reported 28% growth in ad revenue to nearly $1 billion, but apparently it wasn’t enough.

A week later and FB dwells at a dismal $21.09. Clearly, investors saw something they didn’t like in Facebook’s numbers. Whether their expectations were too optimistic, the stock was overpriced, or they saw decelerating growth isn’t clear. (There’s also a round of dilution from insider stock sales coming up, too.)

But we do know that shareholders saw this PowerPoint show and sold, sold, sold.

This deck of slides is an excerpt from Facebook’s investor presentation. (We’ve cut the boring bits, including some of the usual regulatory disclosure smallprint.) It focuses mainly on Facebook’s revenue sources, user growth and operating investment.

The slides also show that profits at Facebook are depressed because of the way it has doubled its investments in property and equipment, and because of ballooning headcount.

Disclosure: The author owns Facebook stock.

Welcome! Here we go ...

Facebook now has nearly 1 billion users, most whom are NOT American.

About half of them use Facebook every day.

A majority of them access the site on mobile devices—which is interesting because Facebook has only just launched a mobile ad product.

Facebook is an ad business. Its fees revenue stream just hasn't amounted to much.

Facebook's revenue is lopsided—most of its revenue comes from the US even though most of its users live abroad.

North American users are MUCH more lucrative than foreigners.

Absent of the stock compensation expense, Facebook's operating cost is pretty disciplined. Nothing's growing out of control.

Here are the operating profits (that one-off stock compensation really took its toll).

More detail on the bottom line. But wait ...

... This is interesting. Even on Facebook's unofficial numbers, profit barely grew. Why?

One factor: A near doubling of equipment and property investment.

And employee headcount has nearly hit 4,000 people. More than 1,300 people have joined Facebook in the last year.

And, er ... that's it! Use the comments to tell us why you think FB is in the toilet.

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