Facebook’s troubled float

May 30, 2012

FROM THE “GEE I’m glad I didn’t buy those shares” file, Facebook continues to tank, slipping below the US$30 mark, struggling after a massive initial public offering (IPO).

Although US stocks rebounded from falls last week, Facebook’s shares still slumped by a worrying 9.62 percent, to end the day at US$28.84 โ€“ which is almost US$10 below the $38 price set at their highly publicised IPO earlier this month.ย Markets in the US, which had been closed on for Memorial Day, ended up for the day.

Facebook is now valued at $61.98bn, a drastic decline from the $104bn they were initially valued at when the company went public.

The IPO has so far proved to be a disastrous move for Facebook, as the situation goes from bad to worse with US authorities investigating allegations that the company gave critical information to some investors but not others. Shareholders have also launched class action lawsuits against CEO and founder, Mark Zuckerberg, Facebook and its bankers.

Financial analysts are now speculating that Facebook stocks could fall further, owing to the sheer amount of hype and subsequent deflation surrounding the float. Traders can now also “short” Facebook shares, betting that the price will fallย and many are betting that Facebook’s share price could end up sitting in the mid US$20 range by June/July.

News that Facebook is investigating building its own mobile phone (which is bizarrely an area where Facebook has struggled to make any money), has so far failed to offset the negative sentiment surrounding the company. PAT PILCHER

Pat has been talking about tech on TV, radio and print for over 20 years, having served time as a TV tech guy and currently penning reviews for Witchdoctor. He loves nothing more than rolling his sleeves up and playing with shiny gadgets.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Give a little to support Witchdoctor's quest to save high quality independent journalism. It's easy and painless! Just donate $5 or $10 to our PressPatron account by clicking on the button below.

Witchdoctor straight to your inbox every 2nd week

Authors

Panasonic Fire TV Be Mesmerised with next gen AI TV
Advance Paris - Designed with French flair. Amplifiers, Streamers, CD players and more www.pqimports.co.nz
Previous Story

TV networks declare war on advert skipping

Next Story

Cisco: The Rise and Rise of The Zettabyte

Latest from Thought Piece

Go toTop