Loading...
See More

Facebook boss loses $4.7bn

Aug 03 2012 12:22 Reuters

Related Articles

Facebook revenue spike fails to impress

Social media blues

Nasdaq to reimburse Facebook investors

How low can Facebook go?

Social media muddle

Value of Facebook 'likes' questioned

 
San Francisco – Facebook CEO Mark Zuckerberg has been hard hit by the selloff of Facebook shares.

Facebook shares continued their losing streak for a fifth day on Thursday, sending the once feverishly sought-after name below $20 for the first time as investors scrambled to get out of the way of a potential share deluge in coming weeks, Reuters reported.

According to cnet.com the share slump shaved some $4.7bn of Zuckerberg’s share in Facebook, an almost 32% drop in the past few days of trading. His stake now sits at around $10.1bn.

According to Reuters, Facebook has shed almost $50bn in value since its debut - more than the total valuation of Hewlett-Packard or Starbucks.

The stock debuted at $38 and hit $45 a share on the first day of trading but has headed south since, pummelled by growing doubts about its lofty valuation, growth prospects and high-profile departures.

The latest wave of selling started with social game maker Zynga spooking investors with its lousy earnings report last Wednesday, and continued with Facebook's own unspectacular earnings.

News that the some big boys have dumped the stock hasn't helped.

According to cnet.com the Wall Street Journal did some digging and found that Fidelity, one of Facebook's largest institutional investors, sold about 1.9 million shares across 21 of its mutual funds in June.

Worst to come?

Meanwhile, investors are struggling to understand the impact of the expiry on August 16 of a lockup period on insiders' sales.

That's when the first restrictions barring employees and early investors from selling goes away, opening a spigot to about 1.88 billion additional shares for trading by year's end, according to Reuters.

Reuters reported that lock-up expirations in internet stocks have a painful history for investors.

Groupon's stock fell 9% on the first day that some company insiders were allowed to sell shares, while Zynga saw its shares tumble 8% on the day its initial insider lock-up expired.

Facebook's first tier of restrictions goes away on August 16 when about 271 million shares will be available for trading, with another 243 million shares set to become available between mid-October and mid-November.

But the big day, according to Reuters, is November 14, when Facebook employees’ more than 1.2 billion shares will suddenly be available for trading.

- Fin24

* Follow Fin24 on Facebook, Twitter and Google+.



facebook  |  mark zuckerberg  |  social media
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
11 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

New forms of digital technology are changing the very ways in which entrepreneurs run their businesses.
 
 

New GIF keyboard on iOS for added fun!

Soon sending an LOL! or facepalm will be so much more fun!

 
 

For chic geeks...

Puppy goes crazy over iPad game
Printable solar panels will bring exciting new opportunities!
Now there’s a special lane for texting while walking
LOL! 7 brutally honest texts from parents

Money Clinic

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