Facebook's long-term outlook: Un-liked

Hitting the un-like button

Shares of Facebook fell again Tuesday as investors continue to shun what was one of the most anticipated IPOs of  all time. Morgan Stanley (MS) and Goldman Sachs (GS) updated their financial projections for the social network after the company added warnings to its IPO prospectus about how its user base is increasing more rapidly than the number of ads it delivers.

The trend was blamed in part on increased use of Facebook on mobile devices, where it traditionally hasn’t shown ads to viewers. Facebook’s stock was recently trading down 4.5%. The stock lost 11% on Monday as more investors and analysts began to question the size of the company's public debut, which initially valued the company at $104 billion. The company is now worth about $90 billion, based on Tuesday's stock price.

Meanwhile, according to Thomson Reuters StarMine, using expected growth rates of about 10.8% over the next decade, values the shares at less than $10, or less than one-third of its current price. Facebook’s debut was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. The social media web site’s 900 million users helped the company generate just $1 billion in profit last year and there continues to be increasing concerns about its ability to grow profits in the future.

Facebook (FB : NASDAQ : US$31.02), Net Change: -3.01, % Change: -8.85%, Volume: 96,861,757

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