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.
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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
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
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.