Wall Street Hates Facebook

facebook opening bell

Facebook shares have taken a beating despite a decent earnings report and two positive analyst notes, causing some to wonder if Wall Street just hates Facebook.

Piper Jaffray analyst Gene Munster told Marketwatch that Wall Street's skepticism is based on two factors: ad growth slowdown and worry that teens are tiring of Facebook.“There have been an increasing number of reports suggesting Facebook’s momentum among teens is slowing,” Munster wrote.

As Wired points out, even a good earnings report last month had Facebook stock rise an anemic 4 percent. The two upbeat broker notes published this week, one from Piper Jaffray and one from Goldman Sachs, didn't prevent another drop of 5 percent.

“Teenager are using other things more. At the same time, they continue to be very active engaged Facebook users,” Facebook chief operating officer Sheryl Sandberg said at the recent D11 conference.

What she says is true. According to a recent Pew study, teens may be complaining and trying other social networks but 77 percent are still using Facebook. Twitter, the next largest social network, only captures 24 percent of teens -- although that number is growing, while Facebook's numbers are flattening.
Perhaps there's a sense of distrust for any business that relies on the whims of teens -- although Wall Street should be aware that many of Facebook's users are much older.
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