Mobile Reality Drives Facebook Shares Back Under $30

Facebook, Inc. (NASDAQ: FB) is suffering a psychological blow today.  The NASDAQ is down about 0.5% but Facebook’s common stock is down now by almost 4% and under the $30.00 handle at $29.50 so far this Monday.  There has not really been much negative news, but perhaps there is a continually growing notion that Facebook’s mobile efforts cannot be remedied.  Or maybe it is just the short sellers.

News was out over the weekend that Facebook is acquiring a mobile apps team from Spool to help address the mobile efforts.  If you rely on advertising media, it is no secret that mobile web traffic is effectively a losing business proposition for just about everyone.  After all, how can a website offer advertising on a 2-inch by 4-inch screen and still offer a great smooth experience for users.

Terms were not disclosed in the deal for the Spool team but the WSJ offered a larger background on the deal.  The Spool blog only goes back to September of 2011 and it has members formerly of Google Inc. (NASDAQ: GOOG).  The company had disclosed raising $1 million in financing just in January from angels and investing groups.  The company’s blog shows that it is shutting down and joining the Facebook team:

• “We started Spool to make content easy to consume on a mobile device. To accomplish this, we built some very sophisticated technology and developed a deep expertise in mobile software development. We firmly believe that solving these problems will be increasingly important as the world accesses the Internet primarily through mobile devices.”

This is not big enough news to drive Facebook down under $30 all on its own.  What appears to be happening is that as Facebook’s mobile efforts get used more and more, it only becomes that much more evident that Facebook faces a revenue issue.  Who knows for sure, but maybe Mark Zuckerberg’s effort to always keep Facebook free will be a “Do-over!” announcement to exclude accessing Facebook via mobile devices.

We would also note that last week brought news that Facebook’s short interest was again at a high.

JON C. OGG