In a review by financial newspaper Barron's, it said that Facebook shares may be overvalued despite getting a boost from first quarter reports that met industry analysts' expectations.
Facebook had closed at US$28.31 or GBP18.18 per share, nearly 60% higher than its lowest levels achieved last summer. This though is still far below its initial offer pricing at US$38 per share last May.
According to Barron's, reiterating a February assessment, Facebook shares should be priced at US$25 per share.
The improvement in Facebook was attributed to the sharp increase in mobile ad revenues, as it rose by 38% in the quarter agains the previous year. There was a decrease though in desktop advertisement revenue, as it remained flat according to Barron's.
Barron's warned that the revenues in desktop advertisments are dropping, which means the market value of Facebook assigned by investors reached US$71 billion. About US$1.5 billion are from these mobile ad sources.
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