PRIVACY SHREDDER Facebook has seen its share price tumble for the best part of two weeks, dipping below the $20 mark for the first time yesterday.
Facebook's overvalued and botched initial public offering (IPO) has lead to serious doubts about the firm's ability to generate cash. After the company announced that at least 83 million user accounts are fake its stock price dipped below $20, ending Thursday trading scraping above that figure at $20.04.
For Facebook's shareholders this means that the fanciful $100bn valuation that investment banks had bestowed on the firm in a bid to ratchet up sales commissions has been slashed. The company isn't even worth half that figure now, as it's currently bobbing around the $43bn mark.
Some investment banks have been hit, with UBS claiming it lost the best part of $356m during the botched IPO as a result of Nasdaq systems failures. In the bank's earnings call UBS said that it will be seeking to recover the full amount.
While Facebook's IPO shambles continues, rival social network LinkedIn has been doing well. The firm's recent financials showed revenues and profits beating expectations, the mirror opposite of Facebook's recent financial report, which raised questions over how the firm intends to make money.
Facebook CEO Mark Zuckerberg's personal fortune fell by over $400m on Thursday alone. Given Facebook's treasure trove of personal data, its stock price won't fall to zero anytime soon, but with Facebook employees' lock-in period not ending until a week before Christmas, the biggest dip in its stock price might happen towards the end of the year.
At press time Facebook's shares are trading at $20.00 after having dropped briefly to $19.98 a few moments previously. µ
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