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Wednesday, May 23, 2012

Facebook stock Rebounds may 23 2012

Facebook stock Rebounds may 23 2012 : Facebook added 2.7 percent to $31.85. The shares fell below its $38 IPO price on May 21. The offering valued Facebook at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential. The slump reinforced concern that the IPO was priced too high.

About 18 million Facebook shares are on loan, an indication of short-sellers' interest, according to Data Explorers Ltd. The amount of stock borrowed equals 4.3 percent of the 421 million shares that are freely traded, the London- and New York-based research company said in an e-mail, citing settled trades as of May 22. The cost to borrow the stock is the most expensive level on the firm's scale.

Stock on loan helps measure the presence of short-sellers in the shares. In a short sale, speculators borrow securities to sell them on the expectation they can buy them back more cheaply before returning the loan. The loans represent about 1 percent of Facebook's outstanding shares, Data Explorers said. That compares with 5.3 percent for Zynga Inc. and 4.1 percent for LinkedIn Corp., the firm added.

Facebook's stock on loan may change as more of the shares become available to borrow in coming days

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