'Overhyped' Facebook shares lose 10 billion on first day of trading as public company
Washington, May 22 (ANI): Facebook shares slumped to more than ten percent below their float price over the first hour of trading, as shareholders scrambled to sell shares in what had been pitched as the greatest growth story of the decade.
Over 10 billion dollars was wiped off Facebook's value on its first full day as a public company.
The company's founder saw the value of his fortune drop by more than 2 billion dollars to just under 17 billion dollars, as the shares closed down 11pc, at 34.03 dollars.
Brian Wieser, an analyst at Pivotal Research Group pointed out that the 'the market is now collectively reflecting the real risks around Facebook.'
"The danger for Facebook, is that when you price it very high, the risks to that price now become the overarching narrative for the company," The Telegraph quoted Wieser, as saying.
According to the paper, the much vaunted 104 billion dollars flotation, the largest ever by a US technology company, is rapidly turning into a major embarrassment for the social networking site and Wall Street.
Technical glitches suffered by Nasdaq delayed the opening on Friday.
The company's main banking adviser Morgan Stanley reportedly bought up shares in significant volumes to support Facebook's stock after the lacklustre float last week.
According to the paper, that support is likely to have been withdrawn in part yesterday, accentuating the share price fall. (ANI)
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