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.
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