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Facebook Shares Fall Below $29: How Much Lower Will They Go?

Facebook Shares Fall Below $29: How Much Lower Will They Go?

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.”

Related Care2 Coverage

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5 Ways The Facebook IPO Teaches Us About How Wall Street Games the System

Facebook’s IPO: Worst of the Decade

 

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17 comments

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8:01AM PDT on May 31, 2012

When people see the $$ signs lighting up they do some really dumb things. The FB IPO was so that the creators of FB could take a lot of their hard earned loot out of the business. There is nothing wrong with that. However, when you align yourself with a criminal organization like GS they take and pump up this stock and create those $$ signs for people. "Get rich quick" becomes the cry and the stock gets pumped up. People bid the stock price up trying to get into a sure thing and it was all created by GS and other criminal type operations. I got a call to buy FB and if it was a penny stock I would have bought some.
Direct your anger towards the right target Goldman Sachs.

5:53AM PDT on May 31, 2012

I don't buy stocks,don't use Apple...

4:03PM PDT on May 30, 2012

Don't use it, didn't buy the stock, never will.

2:29PM PDT on May 30, 2012

GOOD!

2:10PM PDT on May 30, 2012

The proof about the farce of the FaceBook IPO (FB) lies in the recent disclosure that FB would have to produce more than $1 billion USD in advertising per year. Nothing wrong with that right.

Reports say Facebook profited $355 million over 2010's first 9 months. That puts Facebook's total 2010 profits at $600 million.

Personally, I see a lot of red ink or is that your blood.

Facebook sold $1.5 billion worth of new stock to Goldman Sachs and its clients in January at a $50 billion valuation. Today, Kara Swisher reported that "big institutional investors" are asking Facebook if they can buy $1 billion worth of stock at $60 billion valuation.

FB and Goldman Sachs might want to be careful, organized crime is the territory of the U.S. Government.


2:02PM PDT on May 30, 2012

Suckers...FaceBooks has screwed the people twice, 1st, its greatest claim to fame lies in the lives it has helped to destroy. Did any of you actually think that everything that you disclosed in FB was to remain safe from those who would wish to use that info to do you harm.

The second issue is your money, it is soon to be their money, IPO's Suck. They only go to serve the 1% first and then they offer you an overpriced piece of coal.

Perhaps Barnum Bailey was in fact correct, There is an American born every minute.

12:38PM PDT on May 30, 2012

The demise of Facebook will affect me in NO way.

11:26AM PDT on May 30, 2012

If you were the underwriter for Facebook's IPO, what would you have done? What initial price would you have set?

Only time will tell if the IPO was a success. In the future, "they" could say that the Facebook IPO was a great buying opportunity.

9:55AM PDT on May 30, 2012

My heart bleeds for all the greedy people that fell for the Facebook scam!

7:56AM PDT on May 30, 2012

Scam Artists.

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