Facebook shares reach all-time low

External investment in Facebook is still quite new, since the company only opened its doors to traders on May 18th. On that first day all seemed well with the company, and stock prices rocketed. After the excitement of the first day, the service's share prices dropped. They began at $38 per share and reached a peak of more than $42 dollars, but this was short-lived.

On Tuesday, July 31, stocks in Facebook were as low as $21.61 each. That's a drop of 43% from their opening prices. It's closer to a 50% drop from their peak, if you consider it that way. The graph below documents the rise and fall of stock prices in the company over the first week of trading. Just remember that the line is now running lower than it was even then. It isn't a pretty picture.

This was a week after the service began trading. It hasn't gotten any prettier since then.

When August 16th rolls around, those stock prices could drop even further. Company insiders are allowed to sell their shares from that point. An insider denotes an officer, director, or employee. Insiders hold 268 million shares in the company, and August 16th is 91 days after they received their shares. From then on they can shift their stocks, potentially flooding the market with them and dropping them even further.

For a service that seemed so promising in the first 24 hours, Facebook has had a remarkable fall from grace. It is now considered to have been the second worst performer on the stock markets this year. It still has some way to go to take the first place for disappointment. At the moment, the Iowa-based Renewable Energy Group has that honor. Their stocks dropped by 51% from their opening prices. Facebook has some distance to go to beat REG, but its performance so far this year has been underwhelming, to say the least of it.

Source: USA Today
Stock price graph: CNN Money

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Sorry to burst the bubbles of a few haters but Facebook isn't going anywhere. It's still as popular as hell it was simply overvalued upon initial flotation.

Chris123NT said,
They got greedy by trying to go public and it bit them in the ass.....I love it lol
Except that it didn't bite them in the ass at all because it didn't cost them any money and made them tons of money. No offense, but stocks don't work the way you, or most people for that matter, think they do.

how can facebook be failing? it is the center of millions of peoples lives. millions of people log on everyday, some never log out, as they carry it on their mobile phones. so many people can't live without it, and plus they have really good ads, since they know what you've "liked" then they can provide really personalized ads. Facebook is the only website where I have actually clicked an ad.

Underwhelming? That's a very, very nice way of putting it. I would say more like "abyssmal." It will be a good buy at $12.

Most sensible investors look at it and say:
So what are you selling?
How much is that making you in profit?

Then they see that it's just a website filled mostly with junk and some games and that the revenue they make of each user is pretty tiny. In other words it's not worth $40 a share. Likely worth about 10cents a share tbh.

Steffan said,
Their stock is like one of those "Buy my book to become rich" infomercials that you see at 3am

why do you see infomercials at 3m ? ;-)

Next up, $10 range. At that price it might be worth buying but not until they show some real monetization of their ads.