BTIG downgraded the Facebook
Inc(NASDAQ:FB) stock on Monday, rating it at Sell from Neutral and setting a
price target of $16 a share.
Analyst Richard
Greenfield communicated his changes in a note to investors on Monday morning.
The shares in the social networking site had closed last Friday at close to $21
a share. On Monday they were trading down 1.7 percent.
BTIG has cut the
revenue projections of the company from $5 billion to $4.9 billion in 2012; and
from $5.9 billion to $5.6 billion in 2013.
The downgrade comes at
a time when the company seemed to be getting back on track, at least so far as
its stock was concerned with both founder and CEO Mark Zuckerberg and COO
Sheryl Sandberg making all the right noises in recent interactions with the
public and the media.
Monetisation of its
mobile subscriber base is a huge concern for everyone associated with Facebook
and its shares. Greenfield wrote in a blog post that he was, "increasingly
concerned with Facebook’s mobile monetization approach” and saw “growing
tension between the Facebook user experience and monetization, particularly as
the collapse of payment revenues has left Facebook with only one major lever to
pull – advertising.”
“In the face of
drastically slowing payments revenues and falling investor sentiment and
employee morale, it feels like Facebook is pushing advertising monetization
harder than they should be, which we believe will harm user engagement in 2013
and beyond.”
A cluttered news feed
could well put off Facebook users and turn away to other social media
platforms, that are more unobtrusive it their advertising efforts.
Shares of FB ended
lower by 2.44% to $20.40, extending its weekly loss to 5.50%.
No comments:
Post a Comment