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 its third-quarter
results than comments from Facebook's chief financial officer about
its advertising business.
Facebook (FB) ended the day with a gain of 2.4%, to close at
$50.20 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 Salmon 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 Yahoo Inc. (YHOO), Netflix Inc. (NFLX),
Expedia Inc. (EXPE) and Hewlett-Packard Co. (HPQ).
The Nasdaq Composite Index (RIXF) ended a see-saw day by falling
almost 11 points to 3,919, while the Philadelphia Semiconductor
Index (SOX) managed to climb by 0.6%.
One notable decliner was networking equipment maker JDSU
(JDSUD), which fell more than 11% to close at $13.09. Late
Wednesday, JDSU gave a fiscal second-quarter revenue forecast that
fell short of Wall Street analysts' estimates.
Losses also came from Apple Inc. (AAPL), Microsoft Corp. (MSFT),
Pandora Media Inc. (P) and Groupon Inc. (GRPN).
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