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Facebook Falls to Record Low After Morgan Stanley Cuts Forecast

Tuesday, 04 Sep 2012 01:54 PM

Facebook Inc. fell to a record low after Morgan Stanley, a lead underwriter of the company’s initial public offering, cut its price forecast on concern that the social network is struggling to reach mobile users with ads.

Facebook shares fell 1.6 percent to $17.76 at 12:36 p.m. in New York. The company earlier declined as much as 2.8 percent, trading at the lowest level since its May IPO.

As more users access Facebook’s site over smartphones and tablets, they’re exposed to fewer ads, Scott Devitt, an analyst at Morgan Stanley in New York, said in a note to clients. Facebook’s desktop site shows about 30 times more ads per user each day than its mobile counterpart, he said.

Devitt now expects Facebook shares to reach $32 in the next 12 months, down from his previous projection of $38.


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2012-54-04
Tuesday, 04 Sep 2012 01:54 PM
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