The Facebook Inc(NASDAQ:FB) shares hit an
another new low on Friday, brokerages cutting price targets being the immediate
trigger. Several lockup expirations are scheduled in the next few months and
analysts don’t see any respite for the scrip. The mood was set right on the day
after the end of the first lock-in period, when the stock fell 6.3 percent.
The next expiration is due in mid
October which will see 243 million shares hitting the market. On November 14, the
free float will consist of an additional 1.2 billion shares. As of now, 628
million shares are available for trading. As long as these expirations
continue, the scrip is expected to keep on facing technical challenges. Only
after that will the fundamentals come into play. The situation is so bad that
prevailing sentiment of investors is even worse than that of the advertisers.
Brokerages are slashing price targets
drastically. For instance, analysts of BMO Capital Markets have lowered the
target to $15 from the earlier $25. Even BofA Merrill Lynch, an underwriter to
the IPO, has cut its price target to $23, $12 lower than what it had set
earlier. The stock had debuted at $38 on May 18.
At closing on Friday, the scrip stood at
$18.23 on the NASDAQ. The bad sentiment seems to have extended to even
companies associated with the social networking site, like social gaming
company Zynga which was also down 3 percent.
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