Facebook shares fell on a report that advertising spend is down 18% in the first quarter, TheStreet TV anchor Rhonda Schaffler reports in the above video.
NEW YORK (TheStreet) -- Facebook (FB - Get Report) stock closed lower by 0.09% to $110.51 on heavy trading volume this afternoon, after AdParlor told CLSA on a conference call that its advertising spend on Facebook was down 18% quarter-over-quarter in the first quarter, TheFly reports.
Shares tumbled by as much as 3.7% earlier today, but pared losses after AdParlor's director of communications said that the information was incomplete and provided without context, according to Bloomberg.
Investors view AdParlor's ad numbers as highly correlated with Facebook's results. The social network will report 2016 first quarter earnings after the market close on April 27.
Additionally, Facebook announced at its F8 developer conference yesterday that it is broadening its Messenger tool to allow developers to build new capabilities in the form of "bots."
Raymond James warned that investors might take a "wait and see approach" to the bots, according to Barron's.
"Historically, chat applications in the Western world have had difficulty proving out monetization," the firm wrote in a note. "And hence we believe investors will take a wait and see with both FB Messenger and WhatsApp monetization."
However, most analysts are optimistic about the company's 10-year roadmap that it announced yesterday.
Facebook's new bots are largely a way of building Messenger into a "portal" to keep "its massive user base within its walls," Cantor Fitzgerald contended.
TheStreet's Jim Cramer is similarly excited about the bots' potential. "I like this bot," he said in a video earlier today. "Why? Because I've always wanted to be able to text message saying, I want X, or someone tell me about Y. It's brilliant."
(Facebook is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A-.
Facebook's strengths such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: FB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.