FB: BTIG Cuts Estimates on Mobile Rise; Sponsored Stories = ‘Adspam’
BTIG Research 's Rich Greenfield today reiterates a Neutral rating on shares of Facebook ( FB ) while cutting his estimates for this year through 2015 based on a lower confidence the company can monetize use of the site on mobile devices. "We thought we would be more constructive at current levels" on Facebook shares as the stock careened from its initial public offering high of $45 to a recent low of $19.82 , writes Greenfield. "However, we remain NEUTRAL rated on FB shares as our concern over Facebook’s future profitability has increased significantly over the past few months." The rise of " mobile only " users is happening "faster than any media company anticipated," writes Greenfield, and he cites some data from the company's recent Q2 report: On their conference call, Facebook management noted that daily web users in the US declined in favor of mobile and that they were seeing similar trends in other developed markets, although those developed markets were not detailed. In the 10-Q disclosure, it is clear that Europe, as a whole, saw a decline in Facebook web users due to the shift to mobile, similar to the US. Further proof that the shift to mobile is happening faster than anyone anticipated, note the statistic in Facebook’s 10-Q that “Mobile-Onlys” (meaning users who only accessed Facebook from a mobile device) increased to 11% of total MAUs in June 2012 from 9% just three months earlier. While total MAUs were up 6% sequentially, Web/hybrids (meaning us the Web and mobile) were up 4% with mobile-onlys growing 23%. Greenfield thinks the company has no "shiny new opportunity" to monetize mobile, he writes. The "sponsored stories" ad format, which the company said is generating revenue at a clip of $1 million per month on mobile devices, is the equivalent of " adspam ," in his opinion, and therefore no silver bullet:
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