Feeds

Facebook shares drop 10%, trip NASDAQ 'circuit breaker'

Channels Leonard Cohen's 'Dress Rehearsal Rag'

  • alert
  • submit to reddit

Boost IT visibility and business value

In a speedy response to an analyst's negative assessment, Facebook's stock price dove by over 10 per cent in trading on Monday morning, triggering the NASDAQ exchange's "circuit breaker" designed to prevent over-zealous short sellers from further destroying a company's book value.

"What are the shares worth? Perhaps only $15," was the comment in a Barron's article this weekend that helped triggered Facebook's faceplant.

The NASDAQ circuit breaker – painfully explained in a 334-page SEC ruling – is designed, in summary, to "prevent short selling, including potentially manipulative or abusive short selling, from driving down further the price of a security that has already experienced a significant intraday price decline" of 10 per cent.

That would be today's Facebook, which opened the day at $22.86 per share, and as we click "Publish" at half past 11am Pacific time, has rebounded a wee bit to $20.95 per share.

Barron's analyst Andrew Barry, whose Saturday article contributed to the circuit-breaking slide, suggests that "The rapid shift in Facebook's user base to mobile platforms – more than half of users now access the site on smartphones and tablets – appears to have caught the company by surprise."

From his point of view – and traders seem to agree – Zuckerberg and Co. need to figure out how to transition the money-making ad presentations of the social networking site from PCs to smartphones and tablet. And fast.

As of Monday morning, though, the market doesn't appear to have the patience to wait. And to add insult to injury, Facebook now joins another woefully disappointing company, Groupon, whose share price tripped NASDAQ's circuit breaker one week ago today. ®

Build a business case: developing custom apps

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.