On the most critical issue facing Facebook’s future as a public company -- whether it could make money from the soaring number of mobile users, who see fewer ads than other customers - - the letters show executives holding back crucial details until the SEC pushed for further disclosure.
Noting that Facebook was counting some mobile users twice, Jacobs wrote on March 22: “Please explain to us how you determined that your metrics are not overstated.”
Only eight days before the IPO, on May 9, did Facebook make clear in a filing that that daily mobile customers were increasing faster than advertising growth, potentially hurting revenue and profits. It was the strongest public signal that the IPO could fall short of its high expectations. Facebook Mobile Use Under Scrutiny From S.E.C. [bloomberg.com]