08.20.12

‘Stink of failure’

Posted in Culture of Lickspittle at 9:15 am by George Smith

Facebook stock fell below $19/share this morning, so noted by the Los Angeles Times here.

A front page story late last week featured these bits:

Doubts about the Facebook founder intensified Thursday as the stock closed below $20 for the first time. The shares, which slipped to $19.87, have shed nearly half their value since Facebook’s disastrous initial public offering three months ago.

Thursday’s selling was driven by the expiration of provisions that had barred Facebook’s venture capital backers from unloading their shares. Trading volume was abnormally heavy, a sign of the fury with which some of the company’s earliest investors ran for the exits as soon as they could.

“This was the most anticipated IPO in many years and it was like an exploding cigar,” said Barry Ritholtz, head of research firm Fusion IQ. “Every investor thought they were about to become wealthy beyond their wildest dreams, and they had this blow up in their face.”

The danger, Ritholtz said, is that the drooping stock price could tag the company itself with a “stink of failure” that could make advertisers less willing to use Facebook.

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