Wall Street Covets Zuckerberg Facetime Versus Slowing Metrics (FB)

September 12, 2012 12:29 PM EDT
Facebook, Inc. (NASDAQ: FB) is solidly higher Wednesday, but off the highs of the session, as investors weigh the upbeat Mark Zuckerberg interview versus evidence of slowing metrics.

At the TechCrunch Disrupt conference Tuesday afternoon, Zuckerberg addressed the sagging stock price, mobile monetization, Instagram, mistakes and a Facebook search engine.

On the stock price, Zuckerberg called the 50 percent decline since the IPO "disappointing" and suggested investors "double down". With the first ad on mobile only launching six months ago, he promised mobile monetization will come. He said mobile revenue will eventually eclipse desktop revenue. Instagram surpassed 100 million users and he wants the service to reach hundreds of millions more. He called a bet on HTML 5 versus native mobile apps its biggest mistake, wasting years. Zuckerberg said he sees a big opportunity in search and the company is doing over a billion search queries per day without even trying. He also said the company has no plans for a phone.

Baird analyst Colin Sebastian said the interview was "largely upbeat, as the company makes progress with engagement and monetization of users on mobile platforms, a likely positive catalyst for shares."

While the upbeat interview is clearly winning the day, another analyst - Ken Sena at Evercore - chopped numbers on Facebook citing weak metrics among a key demographic.

ComScore data show for August showed time spent was down 12% on pro forma basis year-over-year, Sena highlighted. This was primarily attributed to the key 12-17 and 18-24 age groups declining 42% and 25%, respectively. "We note that although comScore did acknowledge a small change in reporting as of August, which affected Facebook, on a pro forma basis, U.S. core trends showed accelerated decline across all measures," Sena said.

The analyst cut his price target from $34 to $23 and maintained an Equal Weight rating on the shares.

Shares of Facebook are up 5.9 percent mid-day to $20.57.

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