Friday, June 1, 2012

Facebook’s Toxic Domino Effect





According to Dan Lyons Facebook’s  shares keep plummeting, falling to just over half the high reached on the day of the IPO. For every other overhyped and overvalued company in Silicon Valley, this is bad news.

Facebook shares continue to plunge from their IPO price. They’ve now hit $27, which represents only 60 percent of the $45 high mark they briefly struck on the first day of trading, two weeks ago. Facebook’s market value now stands at $58 billion, which is barely more than the valuation that Goldman Sachs and other investors paid in a private round in January 2011—and is actually less than what a lot of private investors were paying for Facebook shares in the secondary market in the months leading up to the IPO.

In other words, the victims of Facebook’s disastrous IPO were not only the “mom and pop” retail investors who foolishly piled into the stock on the day it opened. They’re also the supposedly “sophisticated” investors who bought shares on private exchanges like Second Market over the past year…
Read more at http://www.thedailybeast.com/articles/2012/06/01/facebook-stock-woes-hurt-market-s-view-of-other-new-tech-companies.html

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