July 18 (Bloomberg) -- Millennial Media Inc., a seller of advertising space on handheld devices, declined for an eighth straight day amid concern about the profitability of mobile ads.
The shares fell 1.3 percent to $10.61 at 1:20 p.m. in New York, the lowest price since the company’s March 28 initial public offering. Millennial Media stock slid as much as 4.4 percent earlier today, and has dropped more than 18 percent since its IPO.
“There is a lot of concern right now about what is happening in mobile advertising,” said Jason Helfstein, an analyst at Oppenheimer & Co., in a telephone interview today. “Facebook has been talking a lot about the challenges facing mobile ads. Clearly investors are concerned about owning Millennial Media’s stock.”
The Baltimore-based company projected 2012 revenue of $173 million to $176 million on May 14. Analysts on average project annual sales will be $175.7 million, according to data compiled by Bloomberg. Millennial Media, the second-largest U.S. mobile-ad company after Google Inc., lets advertisers target consumers through applications on devices such as smartphones and tablets.
Shares of Facebook Inc., owner of the world’s largest social network, have also been under pressure amid investor concerns about the company’s ability to make money from advertisers vying to reach social-network users on mobile devices. Through yesterday, Facebook had declined 26 percent since its May 17 IPO.
Still, Helfstein said he expects the performance of mobile ads to improve over time, and he rates Millennial Media stock outperform, the equivalent of a buy rating.
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