Facebook Inc. shares extended their decline following a Reuters/Ipsos poll that showed sagging interest in the site and a minority of users being influenced by ads and comments when making purchasing decisions.
The stock lost $1.03, or about 3.8 percent, to close at $25.87 Tuesday. That's down more than 32 percent from its initial public offering price of $38. Earlier, it hit $25.88, the lowest since the company went public.
Since Facebook's stock began trading publicly on May 18, it has fallen on seven of the 11 trading days. There have been concerns about Facebook's ability to keep increasing revenue and make money from its growing mobile audience, though many analysts hold upbeat long-term opinions on Facebook.
The IPO was highly anticipated and was supposed to offer proof that social media is a viable business and more than a passing fad.
Facebook has nearly a billion users and is based in Menlo Park, Calif.
Meanwhile, compared to six months ago, 34 percent of users are spending less time on Facebook, while just 20 percent are using the site more often, according to the poll. One in five people on Facebook have bought products because of advertising or comments they saw on the site, the poll found.
Facebook, owner of the world’s most popular social- networking service, has faced investor concerns about its prospects for revenue and profit growth. The company said last month advertising is failing to keep up with growth in daily active users as more members accessed the site via mobile phones where its advertising model is still new and has yet to produce meaningful revenue.
Shares of the company have fallen eight of its 12 trading days through Tuesday.
Facebook and Morgan Stanley, its lead underwriter, have faced criticism for increasing the number of shares to be sold in the IPO by 25 percent to 421.2 million days before the offering and pushing up the asking price.
The poll was conducted online from May 31 to June 4 and included responses from 1,032 people in the U.S.
Monday, Sanford C. Bernstein & Co. analyst Carlos Kirjner initiated coverage with an underperform rating and a $25 target price. A near-term slowdown in sales growth will fuel investor concerns about full-year 2013 sales, Kirjner told Bloomberg.
The deceleration may “prove to be a temporary setback if, over time, Facebook manages to improve monetization of its inventory, both PC- and mobile-based, and maximize the value of social advertising,” Kirjner said.
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