Home » Technology » Expenditure concerns prompt Facebook Inc (NASDAQ:FB) downgrades

Facebook Inc(NASDAQ:FB) fourth quarter results beat market expectations, but the expenses of the company has got the analyst community concerned, leading to some downgrades.

Shares in the company fell on Thursday and in afternoon trades were trading down 1.6 percent, just barely holding on to its $30 levels, having previously dipped below that.

Neil Doshi of Citigroup said that the stock would be viewed as a long-term stock. He has downgraded the stock to Neutral from Buy.

“But with plans to invest heavily in the biz in 2013, and little expected contribution from new initiatives like Gifts or Graph Search, we don’t see any near-term catalysts for the stock. And Mobile Ads appear to be cannibalizing Desktop, which further concerns us.”

In the fourth quarter the company said that about 23 percent of its total revenues came from mobile ads, up from 14 percent in the third quarter.

So there is no doubt that the company has been making inroads into the mobile market. A fact that prompted Founder and Chief Executive Mark Zuckerberg to call Facebook a mobile company.

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Facebook also said its mobile active users exceeded its desktop daily users for the first time in the fourth quarter of 2012, highlighting its momentum in that arena. The company had a total of 1.1 billion monthly active users, up 25 percent year-over-year.

Stifel Nicolaus also downgraded the stock to Hold from Buy citing the heavy investment by the company.

“We potentially would look to add to positions in the mid-$20s, or when the duration of this investment phase is better understood, all else being equal,” analyst Jordan Rohan wrote.

BMO Capital cut the rating on the stock to Marketperform.

Analyst Daniel Salmon said that they did not have the basis to raise the target price into the mid and high 30s.

On the other hand, shares of Sutor Technology Group Ltd.(NASDAQ:SUTR) continued to trade above $1. The stock is having consolidation in the past few months after gaining momentum in August. The stock has support at $0.90.



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