Millennium Post

Negative report takes toll on Facebook shares

Facebook shares plunged after Barron's, the influential markets-focused newspaper and website, said the stock was still sharply overvalued and were possibly only worth USD 15. The shares slumped 9.06 per cent to end the day at USD 20.79, after dipping as low as USD 20.36.

The fall came after Barron's published a story saying the world's largest online social networking company was still over-priced despite a drop of nearly half since its public offering four months ago. 'Facebook's 40 per cent plunge from its initial public offering price of USD 38 in May has millions of investors asking a single question: Is the stock a buy?' Barron's said. 'The short answer is 'No.''  'What are the shares worth? Perhaps only USD 15,' Barron's said, adding that even at that level they are 'no bargain.'  The shares are still above their post-IPO low of USD 17.55. But analysts have warned that on 29 October a huge new supply of shares from company employees, up to now prohibited from selling their holdings, could flood the market, putting more downward pressure on the price.
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