Facebook falls below US$30

Wednesday, May 30, 2012

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NEW YORK — Facebook’s stock has fallen below US$30 ($2,620) for the first time since its much-awaited public debut this month.


The stock fell US$2.60, or more than eight per cent, to US$29.31 in midday trading yesterday. That’s down 23 per cent since its public stock debut. It went as low as US$29.27 earlier in the day.


Facebook Inc began trading publicly on May 18 following one of the most anticipated stock offerings in history.


The site, which was born in a dorm room eight years ago and has grown into a worldwide network of almost a billion people, spawning a Hollywood movie along the way, was supposed to offer proof that social media is a viable business and more than a passing fad.


Facebook’s initial public offering (IPO) of stock priced at US$38 raised $16 billion for Facebook and some of its early investors. It had valued the company at US$104 billion — more than Amazon.com at US$98 billion.


The latest share price values the company at just a little over US$80 billion.


The stock’s public debut was marred by technical glitches at the Nasdaq Stock Market that delayed trading.


And the company, along with the investment banks that led the IPO, is the subject of at least two shareholder lawsuits.


They allege that analysts at the large underwriting investment banks cut their second-quarter and full-year forecasts for Facebook just before the IPO and told only a handful of clients. Morgan Stanley has declined to comment. Facebook says the lawsuits are "without merit".

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