Pat Pilcher
FROM THE “GEE I’m glad I didn’t buy those shares” file, Facebook continues to tank, slipping below the US$30 mark, struggling after a massive initial public offering (IPO).
Although US stocks rebounded from falls last week, Facebook’s shares still slumped by a worrying 9.62 percent, to end the day at US$28.84 – which is almost US$10 below the $38 price set at their highly publicised IPO earlier this month. Markets in the US, which had been closed on for Memorial Day, ended up for the day.
Facebook is now valued at $61.98bn, a drastic decline from the $104bn they were initially valued at when the company went public.
The IPO has so far proved to be a disastrous move for Facebook, as the situation goes from bad to worse with US authorities investigating allegations that the company gave critical information to some investors but not others. Shareholders have also launched class action lawsuits against CEO and founder, Mark Zuckerberg, Facebook and its bankers.
Financial analysts are now speculating that Facebook stocks could fall further, owing to the sheer amount of hype and subsequent deflation surrounding the float. Traders can now also “short” Facebook shares, betting that the price will fall and many are betting that Facebook’s share price could end up sitting in the mid US$20 range by June/July.
News that Facebook is investigating building its own mobile phone (which is bizarrely an area where Facebook has struggled to make any money), has so far failed to offset the negative sentiment surrounding the company. PAT PILCHER
