Facebook stock price drops 18 percent lower than IPO
Tuesday, May 22, 2012 2:00 PM
The price for a share of stock in Facebook Inc. dropped today 18 percent below the $38 price of its initial public offering, down to $30.98 a share at one point. Facebook set a record for the biggest initial public offering on Friday, but its stock price was lower than was expected.
Economists have cited Morgan Stanley International Inc. reducing the revenue forecast for Facebook just before the initial public offering as the biggest reason the stock did not sell as well as expected.
Morgan Stanley downgraded Facebook because of worries over the company's profitability in mobile advertising, since many users now use Facebook on mobile devices. Advertising on mobile devices does not sell as well as desktop advertising, according to Reuters.