Facebook Inc(NASDAQ:FB) shares fell more than 3 percent to fresh lows during early trading on Friday on reports that businesses are spending less on advertising on the world's largest social networking site.
Its shares were trading down 3.34 percent at $18.45 at 10:27 a.m. after falling as low as $18.23 in intra-day deals. Nearly 22 million shares were traded by mid-morning. With this Facebook's shares have lost more than half of their value since they listed in May at $38 a share.
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There already have been concerns over the continuing growth in its revenues especially with more than half of its 900-million subscriber base moving to mobile devices. Facebook has been finding it difficult to monetise its mobile subscriber base and get marketers on to it.
“Checks on near-term paid media spending remain challenged,” Daniel Salmon, an analyst at BMO Capital Markets Corp. in New York, said in a research report today. He has a sell rating on the stock and cut his price estimate on Facebook’s shares to $15 from $25.
eMarketer which recently slashed Facebook's revenue forecast for this year and the next said that the social network was grappling with questions from marketers about how well ads on its site are performing.
Facebook has been working with companies to show them that its ads have an impact on its 900-odd million users. Marketers also want a return on their investments in terms of actual impact on their bottom lines and this is the challenge that Facebook faces.