Why Facebook stock prices drop august 2 2012

Why Facebook stock prices drop august 2 2012 : Facebook’s stock price reached a new low Thursday as shares of the world's largest social network fell below $20 for the first time, down by nearly half from its $38 initial public offering price.

The company’s shares at one point dipped to $19.95, before coming back up slightly. At last check, the stock was worth $19.99 per share.



The continuing slide of the stock price comes on the heels of worries over Facebook’s revenue growth, marketing costs and mobile business.

Shares of the company have fallen about 26% since it posted a loss of $157 million in its first quarterly earnings report last week.

Revenue, which increased 32% year over year to $1.18 billion, met Wall Street’s expectations, but investors pummeled the stock and analysts said earnings failed to justify the high valuation.

There may be more pain ahead as 1.7 billion Facebook shares held by early investors and employees are set to hit the market as the lockup period expires over the next few months.

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