Shares of Facebook
Inc jumped 5.6 percent on Thursday after two investment brokerages
upgraded their recommendations, arguing that concerns over the waning
engagement of younger users were overblown.
Still, the share price of the world's largest social network
is at a six-month low, partly due to fears that young users were
beginning to cool their activities on Facebook, in favor of newer
services like Twitter and the increasingly popular photo messaging
application, SnapChat.
In midday trading, shares were up at $24.63.
Jefferies & Co and BMO Capital upgraded the stock to buy and
outperform, respectively. Their analysts argued that user growth may
have leveled off as Facebook gained scale, but it remained the most
popular social media service and upcoming products - such as
higher-margin video ads - may accelerate revenue growth.
"While MAU's (monthly active
users) have somewhat plateaued due to the law of large numbers, we think
there is room for financial upside as we expect marketers will find
Facebook's 1B+ users irresistible despite any incremental changes in
teen usage habits," Jefferies analyst Brian Pitz wrote in a research
note.
0 comments:
Post a Comment