Facebook Shares Reach Fresh Low
Social network praying its ad push will pay off
Facebook shares reached a fresh low in early trading on Thursday, the day workers were allowed to sell another 271 million shares.
Many expected the dip and it arrived, with Nasdaq showing a price of $19.92, representing a drop of six percent on the previous day – and roughly half the original asking price.
A lock-up period for insiders closed today, so the pool of available shares suddenly in creased by 60 percent. Various investors, including Microsoft, Goldman Sachs and Elevation Partners, which has U2′s Bono as a partner, could start selling shares today.
Since Facebook’s IPO in May, when shares were floated at $38, 421 million shares have been trading.
The share price has been declining since the IPO, which was hit by a computer glitch that left some investors clueless as to whether bids had been accepted.
Onlookers have been concerned about the decline, with some suggesting Facebook was failing to prove it could make substantial profit from advertising.
Facebook continues to look for ways to boost its ad revenue. This week it emerged the social networking giant was trialling advertising in some users’ newsfeeds, regardless of whether they “Like” the brand.
Earlier this month, it announced mobile app adverts, which will allow developers to show off their apps for iOS and Android phones on users’ news feeds.
Some analysts remain upbeat about Facebook, given that other tech giants have seen share price declines following the expiration of a lock-up period. Both LinkedIn and Groupon reported notable declines when more shares went on sale.
What do you know about social networks? Find out with our quiz!