Facebook Stock Falls on Second Day of Trading

So where are Facebook's friends now?

If you didn't rush to buy Facebook stock on Friday, you probably made a good decision.

After its IPO of $38.00, the Menlo-Calif. based company's stocks prices have taken a tumble falling $3.97 to $34.26 in late afternoon trading. Earlier in the day the stock had dropped as low as $33.

That doesn't sound like much, but it translates to a loss of "nearly $10 billion of its market value, and is now worth around $96 billion, about $2 billion below Amazon.com Inc.," according to an article in the Boston Globe.

"There must have been some sober second thoughts about this," said Brian Wieser, an analyst at Pivotal Research Group on the drop in share price. The analyst thinks the $38 per share was too expensive given Facebook's unproven advertising model.

-- What do you think? Is Facebook's stock overpriced? Is the social media giant past its prime and no longer the influence it once was?

David Leader May 22, 2012 at 11:57 AM
It's still overvalued; a stock usually "settles" at 16X company value. Currently they are at 74X company value, so their price is nearly quadriple what it should be. It should have fallen further, but capital investors "held it up". Expect it to fall much further over the next few weeks; it's a pretty safe short if you're into that sort of "day trading" thing.


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