Facebook has reported a $157m (£100m) loss on payments to shareholders such as chief executive Mark Zuckerberg in its first results since its eagerly anticipated stock market listing in May.
Second quarter costs and expenses nearly quadrupled, up 295% to $1.93bn from the same period last year.
Excluding staff share schemes, Facebook would have made a profit of $295m.
The figures compare with a $240m profit in the same period last year.
In its statement, Facebook said the rise was driven primarily by "share-based compensation expense".
Shares fell 11% in after-hours trade in New York to a record low of $23.94.
In May, investors had queued to snap up Facebook shares for $38 each.
Sales rose 32% to $1.18bn for the three months to the end of June.
But, according to BBC technology correspondent Rory Cellan-Jones, that rise in revenue may have been due to all the hype surrounding the company's stockmarket share sale.
The number of monthly active users (MAUs) rose 29% from the same period last year to 955 million, but some analysts question the reliability of this data given the number of bogus profiles on the social network.
Facebook has yet to resolve how it generates profits as users move from the computer desktop version to accessing the site via mobile phone.
The company is now making less money from each user as it becomes more difficult to generate advertising revenue.
Its operating profit margin fell to 43% in the period compared with 53% a year earlier.
"What's very clear is that Facebook needs to make a huge and concerted push into mobile. Mobile is the future but for the time being it's acting as a fundamental drag on the stock," said David Wain-Heapy of Best Response Social.
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