By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Facebook Inc. led the action in
tech stocks Thursday, as the social-networking giant shook off
early losses and investors put more weight on third-quarter results
than comments from Facebook's chief financial officer about its
advertising business.
Facebook (FB) rose 4%, to $51 a share, highlighting reaction to
the company's results late Wednesday. Earlier in the day, Facebook
shares slipped as investors keyed in on comments by Chief Financial
Officer David Ebersman regarding a decrease in daily users among
younger teenagers, and that the company doesn't expect to
significantly increase "the quality and relevance" of its Newsfeed
ads in the fourth quarter.
However, some analysts, such as Carlos Kirjner, of Bernstein
Research, said that Ebersman's comments hint that Facebook my have
to soon raise prices on its ads.
"With user growth decelerating, Newsfeed ad load steady, and
multiple data-points suggesting that engagement in developed
markets is not growing significantly, revenue growth has to come
increasingly from rising price-per-ad," Kirjner said.
BMO Capital Markets analyst Daniel Solomon cut his rating on
Facebook's stock to market perform, or neutral, from outperform,
mostly due to what he called "the lack of visibility around
Facebook's opportunity in Social TV advertising."
Advancers included Apple Inc. (AAPL), Yahoo Inc. (YHOO), Netflix
Inc. (NFLX), Expedia Inc. (EXPE) and Hewlett-Packard Co. (HPQ).
The Nasdaq Composite Index (RIXF) rose almost 7 points to 3,937,
while the Philadelphia Semiconductor Index (SOX) managed to climb
by 1%.
One notable decliner was networking equipment maker JDSU
(JDSUD), which was down almost 10% after a short-sale restriction
was lifted on the stock. Late Wednesday, JDSU gave a fiscal
second-quarter revenue forecast that fell short of Wall Street
analysts' estimates.
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