Facebook stock hits record low
Facebook’s stock price hit a record low Thursday, sinking to nearly half its IPO price, as insiders became eligible to sell the first batch of shares that had been “locked up” by trading restrictions since the company’s controversial stock market debut.
With investor confidence continuing to fall, experts said the price of shares in the world’s leading social networking company could decline further if employees and early backers flood the market with more stock when additional lockups expire in coming months.
Thursday’s trading was “not a good sign,” said Trip Chowdhry of Global Equities Research, who has been outspoken in labeling Facebook “a good company but a terrible stock.”
After sinking to a record $19.69, Facebook shares ended the day at $19.87 — their lowest closing price ever — as the stock clung perilously to a level just above half its $38 initial public offering price in May.
Since the May 18 IPO, which valued Facebook at a jaw-dropping $104 billion, investors have been shaken by reports of Facebook’s slowing growth rate and by uncertainty over whether major advertisers are willing to commit their budgets to a still-evolving ad platform. At Thursday’s closing price, the company has lost tens of billions in shareholder value.
“The stock is off on the hype created by the media,” said Michael Pachter of Wedbush Securities. He
argued that most of those who became eligible to sell Thursday — including early financial backers and some top executives, although not founder Mark Zuckerberg — were unlikely to do so because they already made money selling shares for $38 in the IPO.