In what is starting to sound like a broken record: Facebook’s shares again fell, this time dipping below $29 to a low of $28.78, down 9%. The prior low was $30.94 on May 22; at its historically biggest-ever-for-a-tech-company IPO on May 18th, Facebook’s share price was $38 — the shares have lost almost a quarter of their value since then.
One reason for the fall in the company’s shares is that Tuesday was the first day that Facebook options began trading. Options allow bets on the future rising, or falling, of a stock; Bloomberg reports that more than 177,000 puts giving the right to sell were traded. That is, most investors are wagering that Facebook shares will fall even lower.
With Facebook’s declining share price, its market capitalization has also fallen. Don Reisinger on CNET says that the current market cap values the company at about $63 billion, down from the $104 billion when the company went public (could that be why Facebook CEO Mark Zuckerberg, on a honeymoon in Rome with his wife, Priscilla Chan, ran up a modest bill of 32 euros and left no tip at the restaurant Nonna Bella?)
Facebook is reportedly planning to launch its own phone next year, drawing on the expertise of former Apple employees; so far, this news has been “shrugged off by investors.”
In one sign of the repercussions of the Facebook IPO experience/fiasco, the top social network in Russia, Vkontake, is delaying its IPO. Vkontake, which has about 110 million users (70% of whom are in Russia) and Facebook share a shareholder, Mail.ru.
As the BBC technology correspondent Rory Cellan-Jones comments in what seems like an understatement, “Facebook’s stock market debut is already going down as one of the most troubled of recent years.”
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