Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By Money Morning (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

What Drove Facebook (Nasdaq: FB) Shares to a New Low

% of readers think this story is Fact. Add your two cents.


Since Facebook Inc.’s (Nasdaq: FB) debut as a public company at $38 a share on May 18, and the stock’s peak at $45 on the same day, shares have tumbled nearly 50%.

Facebook stock hit a fresh low yesterday (Tuesday), with shares reaching $17.55 before closing at $17.73.

The slump came after a trio of brokerage firms slashed their price targets for Facebook shares. The firms cited the wave of expiring lockup periods that will flood the market with close to 1.7 billion shares over the next several months.

The first lockup period expired Aug. 16, freeing a first batch of some 268 million shares. In mid-October, 192 million more shares will be let loose, and on Nov. 14 a whopping 1.2 billion shares will be free to sell.

The total is more than four times the number of shares floating on exchanges before the lockup periods began expiring.

“It’s like a train coming around the corner toward shareholders, so they better get out of the way,” Francis Gaskin, president of research firm IPOdesktop told the Los Angeles Times right before the end of the first lockup.

Editors Note: Wall Street is finally closing in on what we told you FB stock is really worth.Click here

.

New and Reduced Facebook Stock Targets
Due to the extra shares as well as concerns over Facebook’s declining ad revenue, analysts have been slashing FB price targets. Here are the latest lowered estimates:

  • Bank of America/Merrill Lynch (NYSE: BAC) hacked its target price on FB stock to $23 from $35. BofA cautioned that Facebook will face further selling pressure as additional lockup periods expire. The firm also noted Facebook’s revenue will face increased risks as more users shift to mobile usage, an area where Facebook collects less revenue than it does from desktop users. A decline in social gaming and increased spending are also concerns.

    “Facebook has multiple lock-up expirations over the next year, and recent selling activity on the August lock-up suggests to us the risk of future selling pressure,” wrote BofA analyst Justin Post. Looking ahead to November’s lockup expiration, Post added, “We wouldn’t expect the stock to see buying momentum until December.”

    BofA maintains a “Neutral” rating (what some traders love to call a seven-letter word for “sell”) on Facebook.

  • Stifel Nicolaus (NYSE: SF) was less generous and told investors that the firm would start taking notice of FB shares at the $16 level.

    “Although valuation appears tempting, the uncertainty of the earnings trajectory and increasing public float leaves us cautious,” Jordan Rohan of Stifel penned in a note to clients. While Rohan acknowledges Facebook’s platform “has huge potential” it still must overcome “significant” challenges with monetization.

    Stifel doesn’t have a price target on the stock and currently rates shares a “Hold.”

  • The biggest bear of the bunch is Daniel Salmon of BMO Capital Markets. On Friday he reiterated his “Underperform” rating on Facebook shares and slashed his price target from $25 to $15. Salmon believes Wall Street revenue estimates may be too rich for the third quarter.
    “Checks on paid media spending remain mixed: many conversations referenced a “pause’ in order to reevaluate earned/owned/paid mix and ROI (return on investment) measures,” Salmon wrote. He also noted that investor sentiment “is now much worse” than sentiment among advertisers for Facebook, but that the company’s business fundamentals will once again be the main focus “after the technical challenges presented by lock-up expirations over the next six months have been absorbed by the stock (possibly offset by some index buying at some point).”

Facebook stock gained nearly 5% by 11 a.m. to hit $18.55.

Related Articles and News:

Tags: Facebook Quote Price, facebook shares, facebook stock, Facebook stock price, Facebook stock targets, FB shares, Nasdaq: FB


Source:


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.


LION'S MANE PRODUCT


Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules


Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.



Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.


Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Total 1 comment
    • Anonymous

      What drove it so low is that it nothing more than a data mining operation! Nothing from nothing is nothing. Facecrook will be but a memory by 2020!

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.