SAN FRANCISCO — Facebook stock hit a new low on Tuesday, with the world’s leading social network having lost more than $50 billion dollars in market value since it became a publicly traded company in May.

Facebook shares closed on the Nasdaq at $17.73, up slightly from the record low price of $17.55 seen during the trading day. The California company’s shares recovered to $18.05 in after-market trades.

The price was less than half the $38 that shares sold for at the Facebook initial public offering on May 18.

Weeks of finger-pointing in the wake of the disastrous stock market debut has aimed blame at IPO underwriters; the Nasdaq; top Facebook executives, and investors who pounced despite pre-IPO warning signs.

The stock lost further luster on Tuesday when a New York Times Dealbook article reasoned that Facebook chief financial officer David Ebersman bore most of the fault for an IPO offering with too many shares at too high a price.

“He signed off on the ever-increasing offer price, which ended up at $38 after the company had originally planned a price range of $28 to $35,” the New York Time’s Andrew Ross Sorkin wrote.

“He – almost alone – pushed to flood the market with 25 percent more shares than originally planned in the final days before the offering.”

Henry Blodget of BusinessInsider.com countered in a column that heaping the blame on Ebersman was tempting but wrong.

Facebook revealed in pre-IPO paperwork that its growth rate was slowing; users were shifting to mobile gadgets providing less revenue to the social network, and that co-founder Mark Zuckerberg’s priority was making the Internet more social and not investors wealthy.

Read Entire Article HERE

Readers Comments (0)