Facebook Plunges in Second Day of Trading
Do you hear that? That's the sound of the vaunted Facebook stock falling around $5 or 13 percent in the stock market this morning.That other sound you may hear is investors panicking. You see, what was supposed to be the sexiest IPO of all time actually turned out to be pretty lackluster as the stock closed last Friday at $38.23, about only 0.6 percent higher than it was priced at--even though it set the record having the highest volume of shares traded on its debut day. Arvind Bhatia, a tech analyst with the Sterne Agee investment firm, told the San Jose Mercury News that Facebook's IPO was "a little bit surprising and disappointing ... At the same time, you could give kudos to the underwriters because they priced it pretty close to where it's trading." While another analyst took bearish stance in Bloomberg, “There are only so many people that are going to buy into a hyper-growth story."
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As the way it seems with finance--there are also analysts who say Facebook's lackluster performance on Friday and today's hangover is actually a good thing. "I'm kind of glad there wasn't a big pop. Had this thing traded up 50 percent, it would just make the bar that much higher in terms of what the company has to deliver in revenues to avoid disappointing investors," another analyst told the Mercury News.
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