Feb. 20 (Bloomberg) -- Millennial Media Inc., a seller of advertising space on mobile devices, saw its biggest stock decline since the company’s initial public offering last year after its sales forecast missed analysts’ estimates.
The shares plunged 38 percent to $8.95 at the close in New York. Before today’s drop, the stock had gained 14 percent this year.
Millennial Media, based in Baltimore, projected 2013 sales of $270 million to $280 million. That missed the $288.75 million predicted by analysts, according to data compiled by Bloomberg. The company’s $58 million in fourth-quarter revenue also fell short of estimates.
The forecast raised concern that Millennial Media isn’t capitalizing as much as expected on booming use of mobile devices. Chief Executive Officer Paul Palmieri blamed the shortfall in part on choosing not to chase smaller customers last quarter. Meanwhile, some larger deals that were expected to come through did not, he said.
“It wasn’t really until very late in the quarter that we saw the effect of our choice not to participate in these low-end segments,” he said in an interview.
The company, which held its initial public offering in 2012, competes with Google Inc. and Apple Inc. in helping website owners and application developers sell mobile advertising.
Millennial Media said yesterday that it’s now reaching more than 400 million people a month, including about 160 million in the U.S. Its system works with more than 39,000 applications to show ads to mobile users.
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