What Caused The Collapse Of Facebook Shares

What Caused The Collapse Of Facebook Shares
What Caused The Collapse Of Facebook Shares

Video: What Caused The Collapse Of Facebook Shares

Video: What Caused The Collapse Of Facebook Shares
Video: Why Facebook Collapsed. 2024, December
Anonim

On August 16, Facebook shares collapsed again, thus reaching an all-time low in their value. On this day, one share could be purchased for $ 19 and 77 cents, a similar fact scared off potential investors in the project and made the owners of securities of this social network alert.

What caused the collapse of Facebook shares
What caused the collapse of Facebook shares

The social network Facebook is one of the most popular around the world. The number of users is increasing every day, and the project management meets them halfway, offering new services and additions. It would seem that the value of the shares of this social network should grow by leaps and bounds, but this is not the case.

There have been ups and downs in Facebook shares before, but on August 16, something happened that has never happened in the history of the company - shares in the Nasdaq trading fell almost 7 percent. For comparison, in mid-May, each share was traded on world exchanges for $ 37-38 per share.

One of the main reasons for the fall, analysts say, is the fact that it was on August 16 that the agreement ended, during which some owners were prohibited from selling Facebook securities. This condition was set by Mark Zuckerberg's company to investors in order to support its shares after the IPO. Particularly accepted is the fact that much fewer shares were sold at the time of the IPO than were offered for sale in August.

According to analysts, investors are unlikely to use their newly acquired right to sell securities of the social network, since it is much more reasonable to wait for a new rise in the price of Facebook shares. According to American business observers, Facebook expects two more stages of "unfreezing" securities: in mid-October and November. The latter, according to investors' expectations, will be much larger than the previous ones and will cause an even sharper collapse in stock prices.

Facebook listed its shares on the Nasdaq in mid-May, raising $ 16 billion on its very first day of trading. But the very next day, the value of the securities of this social network began to decline. As a result, over the three months of trading, it almost halved - by 48.4 percent.

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