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%.