Facebook Inc (NASDAQ:FB) stock price today slumped below the $20 mark for the first time since Mark Zuckerberg’s confidence boosting comments last month. The company’s stock was down 2.70% at 1.10 p.m EDT, after shading $0.55 per share, to trade at $19.68.
The company’s stock has been trading between the $20 mark and $23 over the last few weeks, but now, seems to have given into pressure, which seems to be originating from all quarters. It looks as though Chief Executive Officer Mark Zuckerberg’s comments have completely lost impact on the company’s stock, having boosted its price, as investors delved on them. Zuckerberg’s comments at the TechCrunch Disrupt, conference in San Francisco on Sept. 11, sparked an upswing that added more than 24% to the shares over the following week.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
Facebook Inc (NASDAQ:FB) is currently facing three critical headwinds, and investors are gradually factoring them into the company’s stock. For starters, Facebook is under intense pressure from the Securities Exchange Commission (SEC), over risk disclosures before the company’s infamous botched IPO. The financial market’s governing body has been following up with Facebook, to determine the level of risk disclosure exhibited to investors just before the controversial IPO, and Facebook must be sweating to find a solution to this quandary.
Additionally, Facebook Inc (NASDAQ:FB) is no longer receiving favors from the sell side analysts, let alone investment advisers and media personalities. We recently featured an article where, BTIG media reduced its Facebook stock price target to a record low of $16, and downgraded it to Sell, citing several challenges facing the social networking giant.
Brokerage firms are recommending a precautionary approach on Facebook’s stock, citing a perennial problem puzzle in mobile ads, in which, the social media company has achieved a mediocre milestone, as compared to it major competitor in the business, Google Inc (NASDAQ:GOOG).
Credit Suisse Group AG (NYSE:CS) equity analysts have lowered their price target for Facebook Inc (NASDAQ:FB) to $24, from $34, while retaining their neutral outlook on the world’s largest social networking company, as reported by Dan Gallagher, of Nasdaq stock exchange. “We remain on the sidelines given the lockup expiration, mobile challenges, and the nascent stage of ROI measurement on the platform,” wrote analyst Stephen Ju, of Credit Suisse Group AG (NYSE:CS).
Coincidentally, the downswing followed shortly after Zuckerberg announced the 1 billion monthly active users milestone achievement, and the stock is now down 9% since then, and 15% from its September 30, close.
The report also notes that Facebook Inc (NASDAQ:FB) witnessed a 20% decline in desktop platform usage last month, which as we speak, happened to be its sole bread basket as, the mobile platform continues to experience bottlenecks in the ad business. We can only wait and see what Zuckerberg & Co. will be conjuring to spar another rally for the struggling Facebook Inc (NASDAQ:FB), as panic continues to sulk among investors.