SEC Pressed Facebook for Details on Mobile Revenue Before IPO
The U.S. Securities and Exchange Commission pressed Facebook Inc. (FB) executives to explain in more detail how a user shift to mobile devices could impact the company’s profits, according to documents made public today.
“Assuming that the trend toward mobile continues and your mobile monetization efforts are unsuccessful, ensure that your disclosure fully addresses the potential consequences to your revenue and financial results rather than just stating that they ’may be negatively affected,’” the agency wrote to Facebook on Feb. 28.
Facebook shares have fallen about 24 percent since the stock began trading at $38 on May 18 in part because of concern about the company’s mobile strategy.
Facebook amended its IPO filing on May 9, about a week before its $16 billion sale, to say that its revenue may be negatively affected by users accessing the site on mobile devices rather than personal computers. The company said its ability to make money off mobile users was “unproven.”
To contact the reporter on this story: Steven Sloan in Washington at email@example.com