Shares in the social media giant Facebook have reached an all-time low of $20 since it debuted on the stock market in May. The shares were originally valued at $38 dollars and the company itself was valued at $10 billion, more than the combined value of Nike and Goldman Sachs.
The company has shed almost $50 billion in value since it appeared in the public stock market and the prices of its shares have plummeted, some saying due to an approaching deadline for the release of ‘locked’ shares.
Some shares that were awarded to early investors and employees who were bound by an agreement not to sell until August 16 this year. As this date draws nearer, speculation has been growing as to whether the holders of 1.88 billion shares will choose to sell given the current low selling price of the shares. Other non-restricted shareholders may be tempted to ‘take the money and run’ before this date.
Facebook’s growth has been slower than expected from industry experts, the social media company grew 100 percent in the second quarter last year- this year it only managed 32 percent.
A recent report from the company discovered that a large number of facebook profiles are fake or otherwise fraudulent has also caused uncertainty in the stockmarket. The report estimated that there were 83 million accounts that Facebook deem as illegitamate according the their guidelines. Some accounts were duplicates of other users on the site, some were pages created for “non-human entities” such as pets and businesses and some were described as “undesirable” spam-generating pages. The BBC reported that investors may become skittish in the fear that advertisers may drop their facebook ads as a reaction of the news that their adverts may not even be targeting real people.
The company has still not introduced its site to China, or at least past the government’s firewall, where it is banned in its current form. The influx of users from a whole new country could change the company’s fortunes dramatically. Other social-media companies have been largely successful in China, where the main competitor is the site Tencent, worth $35 billion.
There are currrently 955 million users of the Facebook, whose revenues depend largely on advertising. And with the potential for cracking untapped markets in China and the still substantial potential ad revenue the fortunes of this company could survive its rocky first few months on the public stock market.