Facebook Shares Hit Record Low

Social networking site Facebook’s shares slid all the way down by 6.2 percent to reach a new record low. The incident took place on Tuesday which happened to be the third straight day of disappointing results for Facebook Inc. which showed a marked decrease in the growth rate of users and gave rise to renewed doubts regarding its capability to maintain its profitable valuation.

According to market analysts, the main cause for such uncertainty was an important statement from Bernstein Research as well as online chats about the possible increase in the number of programmed Facebook accounts. The stock prices were also affected by the impending sell-off of staff shares which is due next month.

Rise and Fall

On May 18th, Facebook gained the status of becoming the first ever American firm to debut with a total worth of well over £63.7 billion or $100 billion. But the corporation has not been able to maintain the title for long and has sustained a loss of more than 40 percent of its combined value. On the bright side, the company’s stocks even while being down by 6.2 percent at $21.71 still command more than 40 times their forward earnings compared to 15 of Google Inc.

Investors have not taken the news well and have penalized the stocks of the social networking website along with other customer-focused online corporations like Zynga Inc. all the while suspecting their capacity to carry on with their developmental activities and keep up rich estimations.

Facebook published its results last week without providing any forecast or outlook for the year. This was a prime cause for frustration among the investors who had expected to receive some kind of verification of the prospects of its advancement.

Ongoing Troubles

Wall Street is also gearing up for the possibility of an overload of countless number of shares after the date 16th of August, when Facebook staff will be given the freedom to put up their business-awarded shares for sale for the very first time.

There are a few analysts connected to the social network who attribute the rising doubts to the note from the Bernstein Group. The large number of complaints related to the Facebook bot. Lockups has also been partly responsible for the present situation. In addition, shares today are suffering from lockups which put unnecessary pressure on the shares. Many appear to be speculating about the contents of the next update. The long-term situation still seems to be intact.

The IPO of Facebook was supposed to have been the final stage of rapid development for the corporation that was founded by Mark Zuckerberg almost 8 years ago while he was still a student at Harvard. But instead of the expected growth, the NASDAQ debut dated May 18th was bogged down by trading faults and allegations of insufficient disclosure.

UBS put the blame on exchange operator NASDAQ for facing a loss of almost 349 million Swiss francs on Tuesday due to Facebook’s poor debut. It became the most recent commercial investment organization to state a hit from the very first day of trade. UBS revealed that stock orders had been entered numerous times because of a systems failure.

Avatar
Carrie Ann
Carrie Ann is Editor-in-Chief at Industry Leaders Magazine, based in Las Vegas. Carrie covers technology, trends, marketing, brands, productivity, and leadership. When she isn’t writing she prefers reading. She loves reading books and articles on business, economics, corporate law, luxury products, artificial intelligence, and latest technology. She’s keen on political discussions and shares an undying passion for gadgets. Follow Carrie Ann on Twitter, Facebook & Google.

Recent Posts

Panasonic enters a $22 billion vaccine storage race with ultracold carrier

Panasonic enters a $22 billion vaccine storage race with ultracold carrier

Panasonic received several requests from European and American logistics companies to cure test ultra-cold freezer box. This freezer contain...
1 day ago
Orange Telecom to sell 50 % fiber assets for $1.58 million

Orange Telecom to sell 50 % fiber assets for $1.58 million

Orange, the French multinational telecommunications corporation, has agreed to sell part of its fixed fiber assets to a consortium of three ...
1 day ago
Books Bill Gates Wants You to Read This Year

Books Bill Gates Wants You to Read This Year

Have you been waiting for the most-anticipated roundups of the year – books Bill Gates recommends? Well, here it is. ...
1 day ago
Amazon to host pop-up vaccination clinic in Seattle HQ

Amazon to host pop-up vaccination clinic in Seattle HQ

Amazon Inc. plans to set up a pop-up clinic at its Seattle headquarters on January 24 to help vaccinate 2,000 eligible members of the publi...
3 days ago
Morgan Stanley raises CEO James Gorman’s pay to $33 million

Morgan Stanley raises CEO James Gorman’s pay to $33 million

James Gorman’s salary ($33 million) is comprised of four parts: a base salary of $1.5 million; a deferred equity award of $7.875 million; ...
3 days ago
IBM Q4 Profit Up, Banks on Cloud and AI For 2021

IBM Q4 Profit Up, Banks on Cloud and AI For 2021

IBM’s revenue is expected to rise in 2021 and generate adjusted free cash flow of $11 billion to $12 billion for the year. ...
4 days ago