Facebook’s value has dropped 40%


Facebook’s stock has dropped even further by opening yesterday at $28.84, a far cry from its $38 per share price when the social network’s IPO launched less than two week’s ago.

The valuation for the company has dipped as a result, from $104 billion at the launch of the IPO to a little under $62 billion.

The latest drop in the share price has been blamed on options trading, with a Reuters report quoting Ryan Jacob of the Jacob Internet Fund as saying, “The fact that the stock has been weak on the first day of options trading means people are betting on future declines or buying insurance. Investors may want to hold the stock but are buying protection in case the price falls further.”

Analysts are predicting that Facebook’s stock will drop even lower before it gets better but, according to Walter Price of the Wells Fargo Advantage Specialized Technology Fund, “…the infrastructure that Facebook is building, and the fact that they have many advertisers that have built followers and fans on their platform, gives them a base to build a great business.”

Source: Digital Trends


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