Further evidence that the social media gravy train has come to a stuttering halt has come in the news that shares in Facebook are now trading below $20 according to a report in
. The social network floated on the NASDAQ stock exchange in New York on 18 May with shares being offered at $38 each. Sales on the secondary market prior to the initial public offering were trading at as high as $44.10 each in late March, yesterday they closed at $19.69.
Investors were given the green light to sell more of their stock as the first lock up period expired but the additional 271 million shares released to the market failed to bolster the company's value, in fact it declined by a further 6%. Another trenche of shares will be made available in November.
The news makes Facebook's IPO one of the worst performing ever, with shares losing 48% of their value in four months.
This year has seen Facebook struggle to maintain user confidence with several clashes on how the company uses personal data for marketing purposes, the invasiveness of facial recognition technology and the decision by General Motors to pull an entire $10 million advertising campaign for failing to reach performance targets. The social network also revealed that as many as 83 million user accounts were either fake or spam and that it had yet to decide on a strategy for making money from it's mobile presence.
Facebook's shares were up slightly today at $19.87.
TechCentral Reporters