Facebook value set at up to $95bn

 

Facebook sets the share price for its upcoming initial public offering at between $28 and $35 per share, valuing the company at $85bn-$95bn.

The bubble will burst, like it did in the early 2000s, then those shares will be worthless.

The share prices are decreasing.

 

Will facebook start trying to stick adverts on the mobile phone ads next?

Facebook shares dip below $29 to new low

 

 

Facebook shares dip below $29 to new low

 

Facebook shares have dipped below $29 for the first time since their flotation to a new low.

 

The shares were launched at $38 less than two weeks ago during its high-profile flotation, which valued the firm at $104bn (£66bn).

 

Since then, Facebook's shares have lost almost a quarter of their value.

 

Russia's biggest social network, VKontakte, has now postponed its stock market launch, fearing a repeat of Facebook's problems.

 

"The IPO of FB [Facebook] destroyed the faith of many private investors in social networks," said chief executive Pavel Durov in a message posted on Twitter.

 

Facebook shares closed down 9.6% to $28.82, just above its low of $28.78.

 

One reason for the fall in shares since its initial public offering (IPO) is that Tuesday was the first day that options on Facebook stock began trading.

 

Options are a form of derivative, that allow bets on the future direction of the stock. It appears that most investors are betting Facebook shares will head lower.

 

"Facebook's stock market debut is already going down as one of the most troubled of recent years," says BBC technology correspondent Rory Cellan-Jones.

 

The situation is a remarkable turnaround from recent weeks, when the eight-year-old firm's share sale was over-subscribed. The social networking site has transformed the way in which hundreds of millions of people around the world communicate. It is also transforming the way companies advertise to existing and potential customers.

 

But Facebook's 900 million users helped the company generate just $1bn in profit last year, and there are concerns about its ability to increase profits in the future.

 

The flotation was disrupted on its first day of trading by technical glitches on the Nasdaq stock exchange. The share price has since slumped amid worries that the company was over-valued by advisers marketing the float.

 

Now, a group of investors has issued a class-action lawsuit alleging that Facebook revenues were revised down because of a surge in the number of people using mobile devices for apps and connection to websites.

 

The suit targets Facebook, its founder Mark Zuckerberg and the banks behind the flotation, including lead underwriter Morgan Stanley.

 

The share sale in New York raised $16bn for Facebook.

 

Recent reports suggested that Facebook is to launch its own smartphone by next year.

Recent reports suggested that Facebook is to launch its own smartphone by next year.

Zuckerberg is only worth 14 billion now. We should take up a collection for him.

The targetted adverts are rubbish

 

Facebook shares fall by 6% as lock-up period ends

 

Facebook shares have fallen heavily as the first lock-up period, which stops sales by early investors, ended.

 

Shares fell by 6.27% to $19.87 at close of trade in New York, down from $20.74 on Wednesday.

 

About 271 million shares become eligible to be sold on Thursday. Some 421 million shares have been trading since Facebook shares were floated in May at $38 each.

 

Since then, Facebook's share price has fallen, amid worries over its strategy.

 

In early trade on Thursday the shares were down by more than 6%.

 

Lock-ups prevent company insiders from selling their shares in a newly-floated firm, and usually start to expire 90 days from the initial public offering (IPO).

 

They are designed to prevent the share price from fluctuating wildly if too many investors decide to sell their shares all at once.

 

This week, Facebook's operating chief Sheryl Sandberg and finance chief David Ebersman are eligible to sell stock they own. Microsoft, an early Facebook shareholder, will be free to do so too. Other eligible investors include Goldman Sachs and Accel Partners.

 

However, Mark Zuckerberg, Facebook's chief executive, will not be able to sell his shares until mid-November.

 

Other tech companies that have floated recently have seen their share prices fall following the expiration of lock-up periods.

 

Linkedin shares dropped about 7% when its lock-up period expired before rebounding, while Groupon fell 10% on its expiration day.

 

Facebook has lost some of its lustre since its May flotation and after reporting a $157m loss in the second quarter, although most of the loss was due to pay-outs to the company's early investors, including chief executive Mark Zuckerberg.

 

There are concerns over Facebook's revenue streams, and whether it can make money from people using the site on mobile devices, as users move from the computer desktop version to accessing the site via mobile phone.

 

The company is now making less money from each user as it becomes more difficult to generate advertising revenue.

 

Including the shares that became eligible for trade on Thursday, over the next few months, up to 1.91bn more shares could come on to the market as various lock-in periods end.

 

The next lock-up periods expire on the following dates:

 

• 15 October: 249 million shares

 

• 14 November: 1.32 billion shares

 

• 14 December: 49 million shares

 

• 13 May 2013: 47 million shares

 

http://www.bbc.co.uk/news/business-19285925

Best to sell those shares them, the only way is down.