Facebook shares plunge after-hours, despite continued growth in Q1

Facebook (NASDAQ:FB) shares plunged in after-hours trading, despite reporting a surge in first quarter profit and revenue earlier in the week.

Shares closed at an all time high of $153.60 on Tuesday after the results were initially reported, before falling in after hours trading as initial positive investor sentiment cooled.

Facebook saw quarterly profit rise 76.6 percent year-over year to $3.06 billion in the first three months of 2017, with total revenue growing by 49 percent to $8.03 billion.

According to research firm eMarketer, the company is expected to generate $31.94 billion in mobile ad revenue globally in 2017, up 42.1 percent from a year earlier.

However, the company’s chief financial officer, David Wehner, warned investors that ad revenue growth was likely to slow towards the end of 2017 as the social media site reaches “ad load”, the highest number of adverts it can squeeze onto users’ pages before becoming an annoyance.

Facebook’s user figures continued to grow during the quarter, growing steadily towards the 2 billion user threshold with the company confirming that it had 1.94 billion people using its service monthly as of March 31. This is a 17 percent increase on March 2016.

Wehner continued: “As we look into 2017 and beyond, there are going to be a number of initiatives we believe are valuable to the community and to the company in the long term that are going to be net negative on our operating margin.”

The figures come just days after CEO Mark Zuckerberg vowed to hire more employees to crack down on upsetting content being streamed on its Live Stream platform. The social media site has been forced to deal with backlash after several suicides and murders were broadcast live.