Facebook Sinks After First Downgrade Since Cambridge Analytica

• April 18 2018
• Elena Popina

Shares of social media giant Facebook Inc. fell Wednesday after the stock got its first downgrade since January.

Shares of social media giant Facebook Inc. fell Wednesday after the stock got its first downgrade since January.

Research firm OTR Global cut its rating to mixed versus positive amid concern that year-over-year growth in advertisement spending moderated in the first quarter of 2018. The last downgrade of the stock prior to OTR was made by Stifel Nicolaus & Co’s Scott Devitt in January, before the scandal involving Cambridge Analytica.

The company’s first-quarter ad spending will likely rise 19 to 24 percent year-over-year in the first quarter, versus a gain of as much as 30 percent in the fourth quarter, OTR said. Facebook lost 10 percent last month amid concern over the way the company handled its users’ personal data.

Earlier on Wednesday Goldman Sachs’ analyst Heather Bellini said the social media giant will likely report another solid quarter after checks with advertising partners were strong. The company is due to report earnings on April 25.