Shares of Facebook
Inc (NASDAQ:FB) have been under severe selling pressure since the morning trade
and now trading down by 8.36% to $20.96. The stock made an intra-day low of
$20.36, found support at its 50-Day Moving Average price of $20.28.
Today’s sharp sell
came in after a bearish article by Barron's hit the market this weekend , which
stated that the stock may not worth more than $15 at current scenario. The
article further added that the stock trades at high multiples of both sales and
earnings, even as uncertainty about the outlook for its business grows.
Will FB Rebound
After The Recent Slump? Find Out Here
This is not a new concern;
the company has been criticized by analysts and investors ever since it priced
its IPO at $38. The stock has lost about 50% from its $38 IPO price in May.
The article stated that Facebook and its CEO Mark Zuckerberg
were not ready for the rapid shift to mobile and it will not be an easy task
for the company to play catch-up.
Also,
investors need to cautious ahead of another lock-in in October.
The
stock had jumped from $17.55 to $23 or 31% in the past two weeks after Zuckerberg’s optimistic views on
the company. Moreover, there was a rumor that
the company developing its own advertising networking by moving beyond its own
site.
Moreover, last week
Facebook reported that it will begin
charging businesses to run Offers on its social networking site. This will turn
a previously free site into a prospective revenue generator. This comes at a
time when Wall Street is demanding new sources of profit and growth from the
firm.
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