Facebook Inc. on Wednesday recorded a 50 percent rise in quarterly revenue, tripling the first quarter profits from a year earlier to $1.51bn and beating Wall Street expectations.
The company’s shares rose 9.5 percent in after-hours trading on Wednesday to $118.39, setting it on track to open at a new high on Thursday.
Advertising revenues rose to $5.2bn, with more than 80% coming from mobile. Facebook’s focus on live video attracted new advertisers, while sales on existing services also grew.
The Menlo Park, California based company also disclosed plans to create a new class of shares to go along with its existing two, a move aimed at letting Chief Executive Officer Mark Zuckerberg give away his wealth without relinquishing control of the social media giant.
When enacted, the action will amount to a 3-for-1 split that will send about 5.7 billion new Facebook shares into the world, stripped of voting rights.
The idea would allow Zuckerberg, who wants to give away 99 percent of his wealth, to sell non-voting stock to fund philanthropy and keep the voting stock that assures his control.
“This will become fairly common for strong founder CEOs that have established a long tenure of performance,” Ryan Jacob, manager of the Jacob Internet Fund, which oversees $40 million including Facebook shares, said.
“It’s a trend that we’ll see continue as companies get larger. Issues of share dilution come up much sooner for these types of companies, which offer a large portion of compensation through stock.”
Such arrangements are becoming more popular at companies with multiple share classes as a way of insulating founders from dilution. Google parent company, Alphabet Inc. passed a similar proposal in 2014 that ensured its founders’ control by creating new non-voting shares.
Zuckerberg said about 1.65 billion people used Facebook monthly as of March 31, up from 1.44 billion a year earlier.
In addition, the Facebook founder said users were spending more than 50 minutes per day on Facebook, Instagram and Messenger.
Facebook will hold its shareholder meeting on June 20. The meeting will be held in Redwood City, California.