Facebook drops below IPO price in pre-market trading

“Facebook shares fell below its IPO price in this morning’s pre-market trading,” Abram Brown reports for Forbes. “At 8:30 a.m., the stock is trading at $36.70, down 3.9%.”

“The IPO price is a key psychological benchmark for the stock. The stock’s drop below the $38 market increases the possibility that Facebook’s underwriters might need to step in today and support the stock again,” Brown reports. “When the stock threatened to fall below $38 on Friday, the underwriters created a floor at that level, selling reserve shares.”

Read more in the full article here.

MacDailyNews Take: Faceplant.

17 Comments

  1. I bought Friday thinking there might be quick gains. When it turned I realized something: FB just is t worth this valuation. I sold, lost around $100 and was glad it wasn’t worse.

    I believe Facebook intends to. Scone a new kind of operating system for the next generation. They already replace email, webpages, messaging, they keep your photos, they have games… This is headed toward complete connected information — massively networked digital life. It’s the future.

    So if they do this right fb will be worth much much more. But not now. Too many variables.

  2. I don’t disagree with your premise, I believe that is what Facebook wants to do. I do not however believe they will succeed. They have reached their peak, it is downhill from here.

  3. Facebook, the biggest Ponzi scheme promoted by Morgan Stanley since Bernie Madoff kept an account with them.

    Goldman Sachs, Morgan Stanley, all these too big to fail banks aren’t looking out for you, the individual investor’s interest. They’re looking to make you muppets pay for your credulity.

    Biggest Wall Street scam this side of Enron.

  4. For most kids, Facebook is very creepy and very uncool and only used by creeps and old people. For Facebook the IPO is about one thing and one thing only, cashing out. For the most part Facebook is done and is on the road to decline. The IPO is the ultimate way to cash out, no need to find a buyer and when the ride is over it’s easier to just walk away form it no strings attached. I seriously hope Facebook’s IPO underwriter has some very deep pockets there’s a lot of Facebook employees that need to sell their FB Stock and fast. If the underwriters plan to prop up the stock price at the IPO price or above we’ll just have to hope they have a mountain of cash to do it with.

  5. Maybe now all the lost souls that think WOZ is a genius can appreciate how much Facebbok he bought at “any price” and what brilliant savvy he has…

  6. I bought into several IPOs in the past. I’ve learned my lesson – every IPO I have ever invested in quickly (within days) fell below the IPO price, then hovered there for months before finally gaining. It’s part of the game with IPOs. The Bank doing the IPO usually over inflates the price before trading, the Market sets a realistic value after it trades.

  7. Google has a 20X P/E on 2011 earnings.

    Apple has a 13X P/E on 2011 earnings.

    In a historical context, those multiples are reasonable. The S&P 500 historical average P/E ratio is about 16X. So, considering Apple’s amazing growth rate, Apple’s multiple might even be low.

    If Facebook traded at Google’s 20X PE, it would be worth $20 billion. If it traded at Apple’s 13X PE, it would be worth $13 billion.

    Not $100 billion.

    Oh BTW, Zuckerberg still has complete control of the company and can do anything he wants with zero recourse or input from shareholders.

  8. RENN is Chinese Facebook pretty much.
    When they went public, they came in around 18 and I bought
    shares…now they are sitting below 5.
    After that, I am not surprised this is happening to FB.

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