Facebook's stock falls below $30 for first time

May 29, 2012
In this May 16, 2012 photo, the Facebook logo is displayed on an iPad in Philadelphia. Facebook's stock has fallen below $30 for the first time. That's down 20 percent since its stock began trading publicly on May 18, following one of the most anticipated stock offerings in history. (AP Photo/Matt Rourke)

(AP) — Facebook's stock has fallen below $30 for the first time since its much-awaited public debut this month.

The stock fell $3.07, or 9.6 percent, to close at $28.84 on Tuesday. That's down 24 percent since its public stock debut. It went as low as $28.65 earlier in the day.

Facebook Inc. began trading publicly on May 18 following one of the most anticipated stock offerings in history.

The site, which was born in a Harvard dorm room eight years ago and has grown into a worldwide network of almost a billion people, was supposed to offer proof that social media is a viable business and more than a passing fad.

Facebook's initial public offering of stock priced at $38 and raised $16 billion for Facebook and some of its early investors. It had valued the company at $104 billion — more than Amazon.com Inc., at $98 billion, at the time.

But the stock's public debut was marred by technical glitches at the Nasdaq Stock Market that delayed trading.

And the company, along with the investment banks that led the IPO, is the subject of at least two shareholder lawsuits. They allege that analysts at the large underwriting investment banks cut their financial forecasts for Facebook just before the IPO and told only a handful of clients. Morgan Stanley has declined to comment. Facebook calls the lawsuits "without merit."

Wedbush analyst Michael Pachter said that Facebook's stock has been hurt by what he called "near-term issues" that include the Nasdaq glitches, an oversupply of stock that was being offered and the allegations of selective information disclosure.

But he rates the stock "Outperform" and has a 12-month target price of $44.

"Facebook has built a huge moat between it and its competitors, and we endorse Mr. Zuckerberg's mission," he wrote in a note to investors Tuesday, referring to Facebook CEO and founder Mark Zuckerberg.

With the latest drop, Facebook's value is about $79 billion.

Explore further: Facebook gives more details on mobile usage


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not rated yet May 29, 2012
As is observed here,


Not all bubbles rise.
Standing Bear
not rated yet May 29, 2012
Wonder if this will be another Caldera IPO. That one had Paul Allen in on it. Long and very crooked story...Caldera became 'SCO' of recent infamy when it tried to run Linux off the marketplace at Allen's quiet behest. Him and Ransome Love took the investors of that stock to the cleaners and stole it all, but in the end the whole enterprise collapsed in a putrid swamp of lawsuits and counter suits when it took on Novell. Read about it. May be lesson for F-Book too. If U have this stock, bail now and cut your losses. I am speaking from experience with that croooked SCO/Caldera (ST)deal.
4 / 5 (4) May 29, 2012
Non-physical services have no place on the stock market.

There is a reason its called the STOCK market.

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