The overheated public offering of Facebook stock took another big tumble on Tuesday, slipping down to trading a little above $31 a share. The stock opened on Friday at $38 a share, however one trouble sign for FACEBOOK was General Motors pulling their ads from the social network just before the IPO because they found them not to be very productive to sales of their automobiles.
In real dollar terms, Facebook stock may be down as much as $2 billion in dollar value right now. Further, FOX News Business is beginning to question whether this Facebook IPO fiasco hasn’t stunk up the new IPO market so bad, that new issues will never be looked at the same because traders will be more wary next time. But, my hunch is no here. People have a very short attention span for anything related to history, and you can count on them to make the same mistakes over and over if you give them even half a chance. Unfortunately, this won’t be the last time that investors get overly excited about a new IPO and then manage to lose a lot of money within a few days.
Facebook stock was an overheated issue to begin with. Now, the fall to reality is confirming all of this. Overheated issues will always fall to Earth. It’s a law of science.