Facebook Shares Hit New Low
(NEW YORK) — Facebook shares fell 7 percent to below $30 on Tuesday, the lowest since the initial offering, as options trading on the stock began.
The social network has been the worst-performing large IPO in at least a decade, falling more than 20 percent. The shares fell $2.49 to $29.43 in Nasdaq trading at 12:51 p.m. Tuesday. They opened at $38 in their May 18 debut and briefly touched $45.
Investors are sour on Facebook’s prospects, the options trading indicates. An option gives an investor the right to buy or sell a share of stock sometime in the future for a price that’s set today. The volume of “put” options exceeded “call” options by 1.3-to-1, according to data compiled by Bloomberg.
The most widely-sold option bets that the price of Facebook shares will fall to $25 by mid-July.
Facebook is the subject of lawsuits and at least one government probe over its IPO and the news that some big investors were tipped off by analysts that the company’s results would be disappointing.
Copyright 2012 ABC News Radio