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Posted by on May 29, 2012 in Companies, Internet |

Facebook shares fall from $30

Facebook shares fall from $ 30

The downward spiral of does not stop, and amid uncertainty about what happens to the social network in the bag, the company’s stock fell below $ 30, being 20% cheaper price initial sale when the company debuted on Wall Street two weeks ago . This means that all those who bought shares in the first few days have lost money.

The showed a decline of 9.34% at the time of this writing, reaching $ 28.9 USD on Nasdaq. We initially went on sale at $ 38 on 18 May.

The price started falling as we started growing concerns about the real possibilities that the company has to generate profits, which are apparently weaker than initially thought.

The most pessimistic forecasts indicate that the shares could still go down to $ 25 in July, while some even say that the decline would reach $ 16 by December.

The problem for Facebook is that there is uncertainty about their future, and possibly mistrust, two factors that drive down the shares of any company. The social network also can not get to talk to try to reassure investors, as is required by law to remain silent for 40 days after the IPO.

Domino Effect

Some have compared the stock market crash of Facebook with what happened in the 2000s with Boo.com , syndicated as one of the greatest examples of bursting. com. The site was launched in 1998 with the idea of selling clothes online. Before I sold one garment, had already spent $ 125 million to implement its plan without generating revenue.

Beyond the many problems I had to run as a company Boo.com, the blowout was a “wakeup call” to investors, who began to realize the bubble and that, despite the popularity that has a company, if you can not generate income, not work.

Thus, the problems seem to be reflected in Facebook shares of other companies on the internet. The Zynga shares have fallen steadily since the social network entered the bag, standing today at around USD $ 6 USD respect to cost $ 8 to May 18. The evolution of Groupon has been somewhat uneven, but also shows a decline, as well as Yelp , which could reflect a more general distrust on the future of these businesses.

It is too early to draw conclusions, but it is clear that the situation of Facebook will be talking about for quite some time.

Links:
Facebook falls below $ 30 as option trading Begins (Wall Street Journal)
A boo.com moment? Facebook’s IPO faceplant, social media carnage in stocks (Forbes)
Facebook shares fall below $ 30 as U.S. Authorities begin investigation Into IPO (The Guardian)

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