Shares of Facebook are getting a drubbing Monday, even as another Internet stock -- Google -- hits an intraday high.
Facebook shares fell 9 percent to just above $20 in morning trading after an article in the financial publication Barron’s said the social network’s stock price is “still too pricey.”
Despite a steep decline in the value of its stock since its initial public offering in May, Facebook has a business model “in need of a radical change and a still-rich $61 billion market value,” Barron’s said. Facebook’s share price is currently down 45 percent from its IPO price of $38. It hit an all-time closing low of $17.73 on Sept. 4.
Of great concern to the author of the Barron’s article is the rapid shift in Facebook’s user base to mobile platforms.
More than half of Facebook users now access the site using smartphones and tablets -- a development that “appears to have caught the company by surprise,” Barron’s said.
Facebook founder and CEO Mark Zuckerberg “must find a way to monetize its mobile traffic because usage on traditional PCs, where the company makes virtually all of its money, is declining in its large and established markets,” according to Barron’s. “That trend isn’t likely to change.”
A spokeswoman for Facebook declined to comment for this article.
Shares of Google, by contrast, hit another high Monday, trading above $748 per share for the first time since 2007.
Mark Mahaney, an analyst at Citigroup, thinks Google’s share price can go higher over the next 12 months. He lifted his price target for Google to $850 from $740 in a note to clients -- an increase of 15 percent.
The headwinds that faced Google a few months ago, including trouble associated with its acquisition of Motorola and a potential threat to its advertising revenue from Facebook, have dissipated, he said.
If Facebook can prove it can make money from mobile, it could “take a chunk out of Google,” but that won’t happen “for a substantial period of time,” Mahaney said.
Click here to check Google’s share price.
