Facebook sales sink
The world’s favourite social network’s future does not look so rosy as its shares plummeted to 6.3% after initial investors were given the permission to sell their 270 million shares acquired for the first time since Facebook went public last May.
More than half of the 421 million shares sold in its first public offering on May 18 have become available for reselling.
Investors are dismayed by the company’s powerlessness to maintain its revenue growth, and their actions have slashed the stocks by half from its $38 debut. They will also cause the number of shares available to reach 1.4 billion by the end of this year.
Analysts are predicting that this reflects what might happen again in November, when Facebook employees will have the possibility to cash in stock awards.
After the major sell off last Thursday, Facebook has lost $50 billion, equivalent to just under half of its value. The stock ended at a value of $19.87.
Despite such negativity, Facebook is still standing at 40 times its expected 2012 earnings.
Facebook Inc. is the brainchild of Mark Zuckerberg, an ex Harvard student who set up the company from his dorm room. His company debuted with a market value exceeding $100 billion. He ranked 35th on the Forbes’ list of the world’s richest billionaries published in 2011.