Even as investors are debating
about how much moolah the social network can make from mobile device users, Facebook
Inc (NASDAQ:FB) has dropped further, with shares about 10% from the recent
highs. Moreovre, on Monday, the stock had witnessed its biggest decline since
the end of July. The stock has plummeted 45% ever since it became a public
offering.
Barron’s had predicted that the company will
decline to $15 per share or even lower. Chief Executive Officer Mark Zuckerberg,
had tried to infuse some hopes by projecting good profits via their mobile
growth, but investors are not impressed with the way the social networking site
is making money through its ad services on wireless devices, where members
accessing the site more and more.
Jordan Rohan, analyst at Stifel Nicolaus feels that the success of the mobile version of Facebook might cause collateral damage to the desktop medium, which in hindsight is a more profitable platform. Zuckerburg has further elaborated earlier this month that the company is analyzing their mistakes in mobile advertising and revamping their search functions that led to shares growing by 7.7%.
According to EMarketer, Mark Zuckerburg’s
optimism does not seem to be catching on as Facebook only accounts for 2.8% of
the $2.61 billion U.S.
mobile-ad market this year. Google is way ahead, comprising 55% of the market.
Pandora Media and Twitter rank 2nd and 3rd with 8.7% and
5% respectively.
EMarketer has also predicted that Facebook will
slip from its numero uno position in the larger display-advertising market in
the U.S. Google will generate $2.31 billion, whereas Facebook’s estimates come
to $2.16. Facebook had beat Yahoo! when it surged past and grabbed the top spot
last year. But even though the company’s price-to-earnings ratio is better than
competitors like Google and Yahoo!, the stock is being speculated to be
overvalued, which is making investors shaky.
We have to wait and watch for the next set of
figures to come in and reveal the outcome.
No comments:
Post a Comment