Although Facebook’s stock value has recovered from its initial downfall to about $25 per share, one analyst sees another dip coming, largely because of the prevalence of advertising on the site. Richard Greenfield, a media and entertainment analyst for BTIG Partners, told CNBC that he is not confident about Facebook’s future on Wall Street, noting that advertising on the social network looks more like spam.
Greenfield predicted a price point of $22 for Facebook’s stock, criticizing the company for flooding the site with advertising that doesn’t serve a purpose for users. He told CNBC that he wasn’t a fan of the suggested posts that users have seen in News Feeds, which are targeted based on demographics and Web activity, rather than what the user has done on Facebook:
That’s just what Yahoo does. That’s just what AOL does. What makes Facebook special was supposed to be the data on social. Instead, they’re reverting back to what all of the other websites do … It just makes Facebook a lot less special, and it probably deserves a lot less of a premium multiple, because that data just isn’t as good as you thought it was. It’s looking less and less like Facebook and more and more like “Spambook.” You’re seeing ads that just don’t seem terribly relevant to the target audience.
Greenfield also told that Facebook might take a step back in the next year or two in terms of stock value, because Wall Street’s expectations for the company are quite high. Should the company fall a bit short, it would be reflected in its stock price.
Readers: Do you feel that you see too many suggested posts in your News Feeds?
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