Data provided by iNet BFA
Loading...
See More

$50bn wiped off Facebook value

Sep 05 2012 07:35 AFP

Related Articles

US clears Facebook deal for Instagram

Facebook now half price at $19

Facebook director dumps shares

Facebook stock drops below $19

Facebook slumps to new lows

Facebook debit cards for SA

 

San Francisco - Facebook stock hit a new low on Tuesday, with the world's leading social network having lost more than $50bn 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 initial public offering on May 18.

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

The stock lost further luster on Tuesday when a New York Times 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% 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 mobile gadgets providing less revenue to the social network, and that co-founder Mark Zuckerberg'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 Facebook, just as no one has to buy any stock."


* Follow Fin24 on Facebook, Twitter and Google+.

facebook
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

A cash flow crunch often occurs in small businesses trying to balance cash coming in with cash going out. Watch this video to help you improve.
 
 

Savings survey not realistic

Fin24 readers respond to an in-house survey, which found that 60% of readers were confident that they would be financially comfortable in their retirement.

 
 

Start saving...

Time the key for retirement saving
Dummy's guide to saving
Save money with affordable account
All about endowments

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...