Commentary

Facebook Stock Closes At New Low

Even as it taps every ad revenue spigot it can find, Facebook continues to flounder on the stock market. The company's shares closed at a new low Friday after a pair of Wall Street analysts lowered their price targets on its stock, according to a Wall Street Journal report. Facebook shares fell about 5% today to just over $18—more than a 50% fall-off from its IPO price of $38.

Bank of America analyst Justin Post dropped his target on Facebook shares 34% to $23, while Bank of Montreal analyst Daniel Salmon lowered his 40% to $15, the lowest of the 22 analysts with estimates for Facebook. The company's shares most recently took a hit following the expiration of the “lockup” period earlier this month, freeing early investors and company insiders to begin selling shares.

Facebook has rolled out a series of new ad options and initiatives in recent months including expanding mobile advertising, launching a real-time ad exchange, search advertising, and most recently, allowing marketers to target existing customers on the site through contact information like email addresses and phone numbers. Post said in a research note Friday he views the “success of new ad formats as paramount for the stock.”

However, another lockup expiration looms on Oct. 15, potentially resulting in another big sell-off. Post said he doesn't expect to see any “buying momentum” until December.

Next story loading loading..