Advertisement

HindustanTimes Sun,31 Aug 2014

Facebook hits new low after price target cuts

Reuters   September 01, 2012
First Published: 11:00 IST(1/9/2012) | Last Updated: 13:02 IST(1/9/2012)

Shares of Facebook Inc fell 4.5 percent to a new low on Friday after brokerages cut their price targets on the company's shares, saying several lock-up expirations over the next year will weigh on the stock.

Early investors got the green light to sell Facebook shares for the first time on August 16, sending its stock down 6.3 percent and prompting price target cuts.

About 243 million shares will become available for trading from mid-October, with November 14 being the big day when more than 1.2 billion shares will enter the market.

The company's current free float is about 628 million shares.

"We expect investor attention to return to fundamentals after the technical challenges presented by lock-up expirations over the next six months have been absorbed by the stock," BMO Capital Markets analysts said in a note.

They added that Wall Street sentiment on Facebook is now much worse than advertiser sentiment.

The brokerage cut its price target by $10 to $15, 60 percent below the price at which the company's stock started trading on May 18.

Media reports said BofA Merrill Lynch, an underwriter to the IPO, cut its price target by $12 to $23.

The company's shares fell to $18.23 on the Nasdaq on Friday amid heavy trading.

Shares of game publisher Zynga Inc (ZNGA.O), which gets most of its revenue from Facebook, slipped 3 percent on the Nasdaq.


Advertisement
more from Business

Airlines claim some airports charging for landing small planes

Some Indian airlines have claimed that they had to pay landing charges for small aircraft at several airports where rules do not permit such payments and urged the government to look into the matter and help them improve connectivity to non-metro cities.
markets
Advertisement
Most Popular
Advertisement
Advertisement
Copyright © 2014 HT Media Limited. All Rights Reserved