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.
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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.