Facebook Hot In Silicon Valley, Not Wall Street
NEW YORK (CBS NEWS) - On Wall Street Tuesday, one closely watched stock — Facebook — fell again to just over half its initial public offer price. After rising on Monday, the social network’s stock dipped 85 cents Tuesday, closing at $19.16. Its IPO on May 18th was $38.
Three months ago, Facebook employees cheered as founder Mark Zuckerberg launched the social network as a publicly traded company. For a few hours that day, Facebook was valued at more than $100 billion. Now, it’s worth half as that.
Brian Cooley, the editor of the technology tracking website CNET, said the social media bubble may have burst. “It depends on how you’re viewing it,” Cooley said. “If you’re an investor, you could definitely make that argument.”
And what’s “hot” or “trendy” in Silicon Valley may not be so cool in the stock market. “Wall Street judges ‘hot’ differently than the rest of the rest of the world,” Cooley said. “It’s all about momentum and not necessarily just about size.”
With nearly a billion users, Facebook is still huge, but its slowing growth rate has left investors disappointed. The same thing happened with Zynga — an online gaming company that went public in December at $10 a share and is now trading at just $3. Groupon, the discount coupon site, started at $20 a share and is now trading under $5.
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