Down, down down… Facebook just keeps falling. The shares reached a a record low last night with concerns that businesses are spending less advertising on the social network.
Facebook shares declined to $18.02 after the close in New York. The stock has lost more than half its value since shares went for $38 in an IPO on May 17.
“Checks on near-term paid media spending remain challenged,” Daniel Salmon, an analyst at BMO Capital Markets Corp. in New York, said in a research report quoted by Bloomberg.
He has cut his price estimate on Facebook’s shares to $15 from $25.
EMarketer says Facebook may post $5.04 billion in sales this year - down from their February projection of $6.1 billion .
EMarketer now expects revenue to rise 36 percent in 2012 and 31 percent in 2013, compared with an 88 percent gain last year. Growth in advertising will slow to 34 percent in 2012 and 29 percent in 2013, from more than 68 percent last year,said the New York-based firm..
Marketers are asking how well ads on the site are performing, E Marketer analyst Debra Aho Williamson, told Bloomberg.
While Facebook says it is working with companies to show that the ads have an impact with its 955 million users, the social network must move more quickly, she said.
“There is still hesitation about the effectiveness of the advertising, about how much the advertising is worth.”