New York: Facebook’s share price fell below to as low as $33 on its second day of trading Monday. The site’s offer price was $38.
Facebook’s shares were down around 12 percent at noon, however, the value was slightly changed to $38.23 at the closing of its first trading day.
The social site raised $16 million in an initial public offering, and with 900 million it is trying to increase sales by attracting more and more marketers as competition gathered pace.
According to EMarketer Inc, Facebook is set to lose the top spot to Google Inc. (GOOG) next year. Today price fall is a clear indication that the initial offering from the company was too high. “Investors are clearly recognizing the risks embedded in the stock. It’s just been priced for perfection at the IPO price, and that’s clearly unrealistic,” Bloomberg quoted Brian Wieser, an analyst at Pivotal Research Group LLC, as saying.
Morgan Stanley (MS) tried to propped up to keep shares to below further, concerned people who declined to be named told the website.
“It looks like they’re through spending their own money to support the price,” Francis Gaskins, president of researcher IPOdesktop.com in Marina del Rey, California, said. “Shareholders are lined up at the gate –they want out.”
Moreover, Facebook is relying more on cell phones than the Web and it still facing difficulties in Web advertising. The giant General Motors Co. said last week it was declining to put ads on the website.
Last year sales at Facebook came in at $3.71 billion. Google Inc., valued at almost twice as much as FB, reported $37.9 billion in revenue last year.
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