Facebook’s shares continue to tumble

(Associated Press)

(Associated Press)

Shares of Facebook, the most talked about initial public offering in recent years, closed below $29 Tuesday for the first time, shaving about $25 billion off the company’s valuation since it went public two weeks ago.

Facebook closed Tuesday at $28.84, down $3.07, or nearly 10 percent for the day.

Facebook was valued at $104 billion after its shares were priced at $38 for the IPO.  The stock opened on Nasdaq at $42 on May 18. Since the stock plunge, the company’s value has dropped to less than $80 billion.

Several developments weighed on the stock Tuesday, including rumors that Facebook was thinking about buying the Norwegian Opera Web browser and Face.com, an Israeli-based face-recognition technology company. The price tag for Opera could be at least $1 billion and the tag for Face.com could be up to $100 million, according to news reports.

Facebook already has agreed to buy San Francisco photo-sharing app Instagram for $1 billion, but that price will change due to Facebook’s falling stock price. Part of the Instagram purchase will be made in Facebook stock.

Tuesday was the first day traders could buy Facebook options, allowing them to bet on whether the stock will rise or fall. Reuters reported that most are betting the stock will continue to fall.

Investors also are proceeding with caution until Facebook issues second-quarter results in July. Analysts are split on whether founder and largest shareholder Mark Zuckerberg’s company can live up to the hype that preceded the IPO.

Facebook officials aren’t talking about the company’s stock since the company is still in a “quiet period” following its May 18 IPO.

The company, along with its IPO underwriters and Nasdaq, is being sued by investors who have lost money on the public offering.

Meanwhile, Zuckerberg and his new bride, Priscilla Chan, continue to honeymoon in Europe.

10 comments Add your comment

stev

May 29th, 2012
6:29 pm

Really, is this a surprise? If they IPO’d 2 years ago, then maybe. But everyone is over Facebook. If you purchased this stock, you are a twit.

brk

May 29th, 2012
7:18 pm

yes if you did purchase the stock, you are stupid and I hope that zuckerberg falls flat on his face or his bride they look miserable already(in their wedding photo)

Richard D Bailey

May 29th, 2012
7:21 pm

This IPO was never about Facebook. The catalyst was when they exceeded the 500 shareholder threshold at which point SEC rules force them to be a publicly reporting company. As a result they HAD to go public.

However, with that said, this was a true pigs at the trough moment where everyone abandoned their fiduciary duty and tried to get as much out as they could. It used to be that you ran a public company as much for the benefit of the widow on Main St with one share as much as the money manager on Wall Street with a million. That didnt happen here.

Overpriced, overhyped and over sold. The real value of this stock is between $12 and $17.00 per share.

I covered this IPO on my blog http://www.politinomics.com

Red

May 29th, 2012
9:29 pm

\/ 10$ in less than a month. i’d say that’s a genY FU to wall street

Ghost of 86, 99, and 08.

May 29th, 2012
9:49 pm

Once everyone is in agreement that FB will fall and all is doomed, it will rise. Bet the farmville.

Default Settings 2.0

May 30th, 2012
8:04 am

Where can I find the “meh” button?

[...] Facebook’s stock has plunged since the public began buying shares May 18, and the drop has shaved about $25 billion from the $104 billion valuation placed on the company. [...]

A. S. Mathew

May 30th, 2012
3:10 pm

At this hard times where the stock are plummenting all over the world, why in the world, people rushed to buy this new stock for $ 38.00, quite surprising! It will be going down considerably in the days ahead.

buyin

May 30th, 2012
7:48 pm

only naive chumps bought into this overpriced IPO. facebook may end up the year around $10—probably a true value.

Wreckmaniac

May 31st, 2012
11:46 am

All meaningless. The stuff could be worth $1 per share but Zuck will still be filthy rich. When it gets down to a buck I may buy 5 shares. Maybe. Just glad to hear that only “institutional” investors got stung on this one. They can afford it. The average Joe ( me) has better sense than to jump on a totally unknown risk. Wall Street has figured out several much more subtle ways to steal from the common guy than to expect him to bite on Facebook. We common Joes will move on this stuff in about a month after the fur stops flying.