The news yesterday that Facebook shares were again devalued, this time at the hands of Barclays Capital analyst Anthony DiClemente, somehow reminds of the “back when” of Facebook values. Even before the company went public, establishing what a few hundred million users was worth, seemed problematic. Today, the online social network seems to be trending toward being a penny stock.
Citing concerns that Facebook will have problems monetizing their wares via mobile, DiClemente via Forbes;
“With a lack of evidence from FB around significant traction in its mobile monetization strategy, we are revising our estimates and lowering our price target,” he writes in a research note.”
$1.9 billion in taxes, worries over locked up shares, potentially stagnated profits, Facebook would probably have been better off private, except that Zuckerberg and others would not have cashed in for billions. The Facebook co-founder’s promise not to sell his 500 million remaining shares for 12 months bumped confidence in the stock a bit, but employees still hold over 234 million shares that could be dumped any time.
The long and short of Facebook stocks these days seems to be that investing in them will probably be highly speculative. At least this is my take given a fire-sale could happen at any moment. Of course, this could be true of any company, it just seems more likely where Internet startups are concerned. If we can even call Facebook a startup innovation any more that is. So many people have come to rely on FB for some form of daily interaction, be it gaming or just exploring, the little social universe there does not however reflect the high stakes investment world at all. But that’s another story.
For now, Facebook close slightly up at $18.98, up 5.1 percent for the week.