The social network has lost more than a fifth of its value since its faltering Wall Street debut on May 18, while its 28-year-old founder Mark Zuckerberg has been honeymooning in Rome. It is now unlikely to recover in the short term, analysts claimed.
After placing at $38, Facebook’s shares briefly peaked at $45 before sinking back to $38.25 on their first day of trading. They have fallen every day since then, and today plummeted nearly 10pc to a low of $28.84 at the close in New York.
Many brokers are expected to cut their losses now that Facebook shares have passed the important psychological thresholds of $30 a share and a 20pc drop in value.
“When something is this broken this quickly, they sell and move on,” said Sam Hamadeh, managing director of US research firm, PrivCo.
“Historically, initial public offerings that trade down this quickly don’t ever recover. Brokers have lost quite a bit of money and many will have their own rules about dropping out when it passes that [$30] barrier.”
Read more at The Telegraph.