NEW YORK — Facebook shares tumbled to new lows Friday as two analysts from firms that underwrote its IPO cut their price targets on the shares.
Analysts at Bank of America-Merrill Lynch and Bank of Montreal slashed their targets on Facebook 34 percent and 40 percent, respectively, though they cited different reasons for the cuts. Facebook shares sank 5.4 percent or $1.03 to close at $18.06 — a new low — Friday. That puts the shares at about 52 percent below their initial-public-offering price.
Bank of America analyst Justin Post dropped his target on the shares to $23, still about 25 percent above the social network’s current trading price. He cited pressure in the short term from the looming expirations of “lockup” agreements that had prevented some early investors and company insiders from selling shares. But on the plus side, he noted the potential for new advertising formats to help drive revenue growth next year.
Facebook stock fell 6.3 percent on the day an August expiration made 271 million shares eligible for trading, adding to the 421 million already in the market at the time.
