Facebook held its first-ever annual meeting Tuesday at the Westin San Francisco Airport in Millbrae, Calif., and Co-Founder and CEO Mark Zuckerberg addressed shareholders’ concerns about the company’s stock price, which has never approached its initial public offering mark of $38 per share since its first day of trading last May 18.
Although Facebook’s stock value has recovered from its initial downfall to about $25 per share, one analyst sees another dip coming, largely because of the prevalence of advertising on the site. Richard Greenfield, a media and entertainment analyst for BTIG Partners, told CNBC that he is not confident about Facebook’s future on Wall Street, noting that advertising on the social network looks more like spam.
The sentiment on Wall Street following Facebook’s fourth-quarter earnings call Wednesday was more negative than positive, with many analysts pointing to the social network’s staggering spending forecast for 2013 in lowering their ratings.
The main knock against Facebook in financial circles has been its inability to prove that it can be a solid buy for investors, especially in the way of mobile monetization. However, stock analysis firm Trefis thinks that Facebook has done enough in this field, and should be able to share a positive outlook in its fourth-quarter earnings call Wednesday.
Facebook got some more good news on Wall Street ahead of its fourth-quarter earnings call Wednesday), as Raymond James & Associates Analyst Aaron Kessler raised his rating on the social network’s stock to “outperform” from “market perform” and set a target price of $38 per share, matching the stock’s debut price.
The state of California expects to take a $600 million hit in its budgeted projections for revenue from Facebook’s initial public offering, lowering its total for the three years ending in June 2014 to $1.3 billion from $1.9 billion.
Wall Street continues to weigh in on Facebook, but Cowen & Co. Analyst John Blackledge was not as optimistic about the social network as his counterpart at J.P. Morgan, Doug Anmuth, assigning the company a neutral rating.