Facebook Headed for Lower Opening
Posted on May 22, 2012Facebook [FB] is headed in the wrong direction again today. Facebook's shares are down nearly 4% in the pre-market. This would put Facebook well under its lowest point yesterday, $33.58. Facebook shares tumbled nearly 11% on Monday, which was the best day of the year, so far, for the Nasdaq. The embarrassing plunge followed Facebook's weak IPO on Friday, which only maintained its $38 IPO listing price because of huge help from underwriters.
Facebook still has an super high P/E of 78.59, so it could be a while before its shares find a bottom on the Nasdaq. Facebook was originally supposed to be listed at $28, but Facebook executives and bankers decided to bump the price up to $38 just days before the IPO. This price evaluation mistake will come at the expense of retail investors, who bought shares at $38 a share or more on Friday.
David Weidner calls Facebook "nothing but an embarrasment." Paul B. Farelll says Facebook could "destroy the U.S. economy." Facebook is going to need some good news soon to reverse this sell trend.