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Facebook stock troubles continue to puzzle market investors

While Zuckerberg Honeymoons

By DiMarkco Chandler

Facebook Stock continues to fall for the third day in a row. It appears that investors know something that the rest of the world is oblivious to; or maybe Mark Zuckerberg has merely played his cards right. Computer World reported that “Dan Olds, an analyst with The Gabriel consulting Group, had a totally different take on Facebook’s stock numbers.” The article reported Olds as suggesting that Zuckerberg may have deliberately priced the stock “slightly above what the market seems willing to pay,” that would ensure “that the maximum amount of money went to Facebook and its people who were selling the shares, not the investment bankers.”

While this may be true, I am sure Zuckerberg did not see this steady three-day drop coming. The question is, “why?”
A cursory inquiry to what might have caused the drop in stock prices seems to draw the same answers over and over again. That is the idea that Facebook had no real long-term plan to monetize the company.

However, it appears that this particular misfortune may have had nothing to do with Facebook’s future outlook. What does seem to be emerging is a sort of Murphy’s Law conundrum. Starting Friday, Facebook IPO debut was nothing less than disappointing. By noon the following Monday, the disappointment nearly turned into a run as a technical glitch on Friday left many orders waiting to be filled on Monday. CNBC reported today that that technical glitch prompted the Nasdaq OMX Group to issue an alert to investors saying, “any investor who lost money because of the delay could be eligible for compensation,” as long as claims were submitted by noon on Monday. It doesn’t take a rocket scientist to quickly grasp that a decision to offer investors stock refunds would potentially create the kind of frenzy selloff environment that resulted, especially since Facebook’s stock appeared volatile out of the gate.

In an article on cnbc.com, we learn that at the end of Monday’s trading, a number of brokers expressed disappointment, including Jon Najarian, co-founder of broker TradeMonster.com, saying “The whole FB story is a fiasco.” He was pointing to the issues in delayed processing, which now seems to have had a catastrophic effect on the declining purchase price of the stock.

I’d like to hear what you have to say.