Facebook shares drop 11 percent
“We’re very bullish on Facebook, but the share price just wasn’t justified,” said Rick Summer, an analyst at Morningstar. “It was overvalued.”
Share prices would have plunged immediately if not for the intervention of Morgan Stanley and at least one of the other banks underwriting the company’s public offering. They bought stock to prop up the price, and it closed Friday just above $38.
“The people who have to worry are the people who bought the stock on Friday,” Summer said.
Indeed, the drop is likely to anger investors, and it led Monday to a round of speculation about why Facebook isn’t worth as much as some people thought.
Even so, many analysts spoke highly of the company, which has evolved from an idea hatched in a university dorm into a company that, even with yesterday’s losses, is valued by the market at $93 billion, roughly the same magnitude as an established American icon such as McDonald’s.
Still these folk will not give a stuff if they managed to sell their shares on opening day. Why were they selling ? Well to give the small investor a chance of course.
Who is selling Facebook shares?
QUIZ -- What do dot.com South, Sea Island and Facebook have in common ?
Answer -- Bubbles Bubbles Bubbles Bubbles Bubbles Bubbles Bubbles Bubbles Bubbles Bubbles
Edited by abarbarian, 22 May 2012 - 09:38 AM.