Facebook stock slide continues

Sep 05, 2012
Facebook stock hit a new low on Tuesday, with the world's leading social network having lost more than $50 billion dollars in market value since it became a publicly traded company in May.

Facebook stock hit a new low on Tuesday, with the world's leading social network having lost more than $50 billion dollars in market value since it became a publicly traded company in May.

Facebook shares closed on the Nasdaq at $17.73, up slightly from the record low price of $17.55 seen during the trading day. The California company's shares recovered to $18.05 in after-market trades.

The price was less than half the $38 that shares sold for at the Facebook on May 18.

Weeks of finger-pointing in the wake of the disastrous has aimed blame at IPO underwriters; the Nasdaq; top Facebook executives, and investors who pounced despite pre-IPO .

The stock lost further luster on Tuesday when a Dealbook article reasoned that Facebook chief financial officer David Ebersman bore most of the fault for an IPO offering with too many shares at too high a price.

"He signed off on the ever-increasing offer price, which ended up at $38 after the company had originally planned a price range of $28 to $35," the New York Time's Andrew Ross Sorkin wrote.

"He - almost alone - pushed to flood the market with 25 percent more shares than originally planned in the final days before the offering."

Henry Blodget of BusinessInsider.com countered in a column that heaping the blame on Ebersman was tempting but wrong.

Facebook revealed in pre-IPO paperwork that its growth rate was slowing; users were shifting to providing less revenue to the social network, and that co-founder 's priority was making the Internet more social and not investors wealthy.

The stock structure at Facebook was intentionally set up to keep control in the hands of 28-year-old Zuckerberg.

Facebook's share price was, and remains, way out of line with its projected earnings, according to Blodget.

"In short, those who want to blame Facebook CFO David Ebersman for their Facebook stock losses are doing a masterful job of not accepting responsibility for their decisions," Blodget wrote.

"No one had to buy , just as no one has to buy any stock."

Explore further: Jury says Silicon Valley firm did not discriminate (Update)

Related Stories

Tale of the tape: Google versus Facebook

May 17, 2012

Facebook is the hottest Internet company to hit the stock market since Google went public in 2004. The Silicon Valley companies, located seven miles apart, also happen to be locked in a bitter battle for Web surfers' allegiance ...

Recommended for you

Tesla shares jump on Musk 'tease' in tweet

4 hours ago

Tesla Motors shares jumped Monday after co-founder Elon Musk tweeted that the company would unveil as "major" new product line next month, leaving analysts guessing.

Amazon unveils move in local services

10 hours ago

US online giant Amazon said Monday it was launching a services marketplace offering to connect consumers with businesses offering anything from home improvement to piano lessons.

Intel in talks with Altera on tie-up

Mar 27, 2015

US tech giant Intel is in talks with rival Altera on a tie-up to broaden the chipmaker's product line amid growth in Internet-connected devices, the Wall Street Journal reported Friday.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.