6:00 pm May 29, 2012, by Christopher Seward
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.
Get inside Atlanta's and national business news and how it affects you.
Vacation stops, manage subscriptions and more