After a record low on Thursday, stocks of the major social networking site, Facebook, hit another low Friday. In the morning shares fell to $19.01, about 50 percent of its initial offering of $38 since it first when public on May 18.
On Thursday over 270 million of America's #1 social networking site became available. Earlier in August sticks fell dramatically after Facebook revealed that over 83 million fake Facebook accounts were created.
The New York Times predicts that the shares could fall to a devastating low of $10. The main problem Peter Evais of the NY Times is that Facebook tended to over-estimate its ability to "entwine advertising into all interactions on its site to generate enormous revenue."
As an increasing number of investors have started pulling out of Facebook, the Wall Street Journal reported that Facebook CEO and founder Mark Zuckerberg, personally suffered a loss of $600 million. He told WSJ that the fall in stocks was "painful," to watch.
On Thursday, stocks fell to $19.87 or 608 percent. As things seem to be getting more frightful for the networking site, Wall Street analysts are beginning to panic, predicting that in the next few months FB shares will become increasingly abundant in the market. The shares that became available in the past two days represent 14 percent of the 1.91 billion shares that will become available in next nine months.
Rory Maher, an analyst at Capstone Investments Inc. told Bloomberg, "Anytime you have a lot of shares come out on the market like that, it's going to put some pressure on the stock," Maher said. "They're still figuring out the best way to optimize their core business. And they haven't quite done that yet."
