Facebook downgraded for first time since Jan
April 20, 2018Facebook shares has received a downgrade for the first time since January 2018 and owing to this rating, the social media giant saw its stock tumble.
The downgrade was slapped on Facebook stocks by research firm OTR Global that cut its rating to mixed versus positive amid concern that year-over-year growth in advertisement spending moderated in the first quarter of 2018.
Before the OTR downgrade, Facebook received a downgrade in January by Stifel Nicolaus & Co’s Scott Devitt. This was before the scandal involving Cambridge Analytica. The company’s first-quarter ad spending will likely rise 19 to 24 per cent year-over-year in the first quarter, versus a gain of as much as 30 per cent in the fourth quarter, OTR said. Facebook lost 10 percent last month amid concern over the way the company handled its users’ personal data.
The OTR research team uses information gathered through methods including interviews with industry experts, client events and company filing reviews, according to the firm’s website. They do not give stress on news in the traditional media.
Earlier on Wednesday Goldman Sachs’ analyst Heather Bellini said the social media giant will likely report another solid quarter after checks with advertising partners were strong. The company is due to report earnings on April 25.
Facebook shares fell as much as 1.7 percent on Wednesday, heading for the first loss in four days. The stock has added 3.9 percent this month, narrowing its decline since mid-March to 10 percent. Options traders have taken notice of the stock rebound: the cost of protecting against declines in Facebook shares are at the lowest level since February, before the Cambridge Analytica scandal roiled the stock in March.
