Facebook falls as mobile ad growth fails to impress
REUTERS - Shares of Facebook Inc(FB.O) fell as much as 8 percent on Thursday as a surge in fourth-quarter mobile advertising revenue failed to live up to Wall Street's high expectations.
Facebook has long established itself as one of the most popular websites with more than a billion users, but investors have worried that until the company's mobile advertising strategy takes off, revenue growth will remain shaky.
Three brokerages downgraded the stock, but most analysts said investor expectations were too high and Facebook's mobile advertising business was a good long-term bet.
Shares of the company recovered some of their early losses and were trading down 3.5 percent at $30.14 in late morning trading on the Nasdaq. The stock has lost over a quarter of its value since its botched debut in May.
"We remain encouraged by Facebook's ability to attract mobile ad dollars in the young mobile display market," Nomura analyst Brian Nowak said.
Facebook CEO Mark Zuckerberg has said the company will be able to make more money from users logging into their Facebook accounts on their mobile devices than on desktops.
The company reported a better-than-expected fourth-quarter profit on Wednesday and said mobile advertising revenue doubled to $306 million, suggesting it was making inroads into handheld devices such as smartphones and tablets.
Investors were looking for at least $350 million in mobile advertising revenue, Piper Jaffray analyst Gene Munster said in a note to clients.
"While the trajectory of mobile growth may not be as steep as some investors were hoping, the theme of mobile as the future of Facebook remains intact," Munster said.
BMO Capital Markets analyst Daniel Salmon, who downgraded the stock to "market perform" from "outperform", however said Facebook's 2013 stock performance would not be dictated by its ability to generate mobile ad dollars.
He said new catalysts were necessary to drive Facebook's stock price up.
(Reporting by Neha Alawadhi and Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)
- Tweet this
- Share this
- Digg this
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- Russia can run on empty for a year if sanctions block new bonds
- Mumbai hit by big power cuts after technical glitch at Tata Power unit
- Rupee sees biggest fall in three weeks on broad dollar gains
- 100 days of Modi: Good for business, not so good for marginalised groups
China's latest antitrust probes, which have hit firms such as Microsoft and Volkswagen AG, are not protectionist tools that favour domestic firms, an official of the country's price regulator told the official China Daily. Full Article
Data scientists are increasingly becoming important to the world's tech companies. Video