Is Facebook’s Increased Stock Price Padded?

Facebook-logoFacebook has gradually been seeing an improved stock price for the past few months and recently reached a decent $28.31 per share price. This improvement seemed to absolutely mirror experts’ expectations for the company which many saw as a positive sign. Some, however, feel that this is not a fair indication of the company’s worth and that the wrong things are being taken into account.

The main critic of this new perceived stock price strength is financial newspaper Barron’s. They argue that as this new stock price is strongly based on the growth of the company’s mobile ad revenue that the results are misleading. This is because apparently the ad revenue for Facebook’s desktop has plateaued and may in fact take a dive in the not too distant future.

There is also a sense that although Google and other social media outlets are working to improve their services Facebook is only looking to increase ad revenue. This activity generally only results in inflating stock price but not keeping the site relevant or with the times. Subsequently Barron’s feels that Facebook should only really be worth about $25 a share or perhaps less.

Comments

  1. I should certainly hope not.

  2. allison says:

    hmmmm…. food 4 thought

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