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April 24, 2019
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Business Science

Facebook shares fall below $30 after its $38 IPO

New York: Facebook shares fell more than nine percent on Tuesday and decreased to as low as $28.78, given its IPO price of $38.

Facebook’s market value stood at about $63 billion, down from $104 billion less than two weeks ago went the site went public.

Facebook’s shares have lost almost a quarter of their value till now and analysts think shares’ prices may fall down further.

“When you see a lot of people buying puts, that may put downward pressure on the stock because of the hedging that market makers have to do,” The Wall Street Journal quoted Brian Overby, senior options analyst at TradeKing, as saying.

VKontakte, Russia’s biggest social network, has now postponed its stock market launch after the Facebook fiasco, according to the BBC. “The IPO of FB [Facebook] destroyed the faith of many private investors in social networks,” said chief executive Pavel Durov in a message posted on Twitter.

“One reason for the fall in shares since its initial public offering (IPO) is that Tuesday was the first day that options on Facebook stock began trading,” BBC said.

Facebook has been trying to find more ways of earning more and more profits as it could only generate $1bn in profit last year with its 900 million users.

Recently, New York Times reported that Facebook is going to launch its own smartphone nest year. Facebook’s mobile audience has been growing and the site has been trying for a while now to make out money from them. Facebook has also launched its own app store recently.

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