Facebook (FB) Shares Slide, Stifel Downgrades to Hold

Shares of Facebook (NASDAQ: FB) are lower this morning by 4%, following CEO Mark Zuckerberg's announcement to change the News Feed, resulting in a downgrade from Stifel to Hold (from Buy), with no change to the $195 price target. During an interview with the New York Times, Zuckerberg identified the driving force behind the proposed changes saying, 'if what we’re here to do is help people build relationships, then we need to adjust."

Analyst Scott Devitt sees "too much uncertainty to the economic impact" of Facebook's plans for meaningful changes to the News Feed. Commentary from CEO Mark Zuckerberg, acknowledged expectations for other measures of engagement to decrease, but suggests this is the better long-term path to a stronger community and business.

Despite the downgrade, the Stifel analyst believes this is the right move for the "long-term sustainability of the platform,' yet still expects shares to struggles, as the proposed changes to the social networking platform, will reduce long-term economic visibility for investors.

FB is slated to announce fourth quarter earnings on January 31st after the market close.

StreetInsider Premium first published a variation of this article at 9:10AM ET. Try StreetInsider Premium for two weeks free here.

You May Also Be Interested In

• Morgan Stanley Assumes Prada SpA (1913:HK) (PRDSY) at Equalweight
• Stifel Starts Applied Aerospace & Defense (AADX) at Buy
• onsemi downgraded by TD Cowen after Synaptics deal clouds growth story