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Mark Zuckerberg Loses $1.5 Billion On A Bad Day For Social Media Companies

English: Mark Zuckerberg, Founder & CEO of Fac...

Facebook CEO Mark Zuckerberg lost $1.5 billion today. (Photo credit: Wikipedia)

After losing about $2 billion more than a week ago on Facebook‘s second trading day as a public company, CEO Mark Zuckerberg came out of the three-day weekend to witness another precipitous drop in his fortune. According to Forbes’ Real-Time Billionaires list, the value of his stake in Facebook plunged $1.5 billion to $14 billion after the company’s share price fell below $30 on Tuesday.

Facebook’s stock closed down 9.6% at $28.84. Since Facebook’s stock debuted on the Nasdaq on May 18 with underwriters selling shares at $38, it has dropped 24.1%.

Selling pressure seemed to be boosted by the start of options trading on Facebook, which opened today with record volume and a fair amount of negative sentiment. With options, traders can bet on a stock by paying less to buy an option than they would have to by buying or shorting the stock itself. That sentiment can in turn affect interest in a company’s shares.  Read More


How Facebook could destroy the U.S. economy

By Paul B. Farrell, MarketWatch

Yes, endangered. The number of public companies has declined 37% since 1997. The number of IPOs has dropped from 311 annually before 2000 to 99 in the past decade. Meanwhile, the smart CEOs and the Super Rich are “going private,” to avoid government red tape restricting capitalism.


Over at BusinessWeek they’re warning investors that the growing number of “cutesy mascots” is a dangerous reminder “of the dot-com boom’s irrational exuberance.” They’re also red flagging new reports that “more Chinese investors are betting on U.S. start-ups.” And feeding the flames.

What’s going on? Facebook’s in trouble, that’s what. Now in the crosshairs of public scrutiny, everybody’s taking potshots. And the warnings are just beginning:

Everything from Facebook FB -3.39%  being “too big to fail or succeed” to a Chicago attorney warning that the stock could “crater” if Facebook can’t grow revenues 41% annually for five years to “sustain its value” to a warning that Facebook’s one of the “black swans” that could eventually bring down the global economy.  Read More

Facebook, Zuckerberg sued over IPO

Facebook shareholders have sued the social network, CEO Mark Zuckerberg, and a number of banks, alleging that crucial information was concealed ahead of Facebook’s IPO.

The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday’s initial public offering “a severe and pronounced reduction” in forecasts for Facebook’s revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs. (The case: Brian Roffe Profit Sharing Plan v. Facebook, 12-04081.)

Earlier this month, Facebook updated its filings with the Securities and Exchange Commission to say that the shift to smartphones and other mobile gadgets is cutting into the prices it can set for advertisers, which would in turn hurt the company’s revenue. In March, the social network had 488 million monthly average unique users of its mobile products, out of a total of just over 900 million registered users.

The plaintiffs charge that the changes to the forecast by several underwriters of the IPO were only “selectively disclosed” to a small group of preferred investors and not to the investment community at large. “The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result,” the complaint says, per the Reuters report.  Read More

Facebook’s Debut Marred by Trading Glitches

Nasdaq’s sign carried live video of Mark Zuckerberg ringing the bell from Menlo Park, Calif.

Friday should have been Facebook’s day to shine — and Nasdaq’s as well.

Investors and the media from around the world were waiting for 11 a.m., when shares in Facebook would finally begin trading on the Nasdaq stock market. At $16 billion, it was one of the biggest initial public offerings ever held in the United States, and the largest by far handled by the exchange.

But at 11 a.m., Facebook’s lead underwriter, Morgan Stanley, requested a 20-minute delay. That in and of itself was not unusual — but what happened next was. Traders were first informed that the company’s opening price was indicated to be $42 a share. But orders failed to be executed, or in trader parlance, “print.”

The quiet confused many. Some underwriters wondered whether Morgan Stanley had asked for another delay, and traders called Nasdaq, only to be told to stand by.  Read More

Facebook Wants You to Donate Your Organs

Zuckerberg Good Morning America Organ Donor facebook

Facebook CEO Mark Zuckerberg is hoping to use the power of his 900 million member social networking platform and peer pressure to convince people to become registered organ donors. Starting Tuesday, Facebook users living in the U.S. and U.K. can add an organ donor status to their Facebook profile and post it publicly to their Timeline.

Zuckerberg says the inspiration behind Facebook’s organ donation push comes from COO Sheryl Sandberg and Dr. Andrew M. Cameron, a transplant surgeon at John Hopkins Hospital in Baltimore. Zuckerberg attended Harvard with Sandberg and together came up with the idea after meeting at a college reunion last spring, according to a John Hopkins press release. Zuckerberg early Tuesday told the ABC new program Good Morning America his girlfriend, Priscilla Chan, who is studying to be a pediatrician, was also an inspiration.

Users living in the U.S. and U.K. that want to become donors can use the new feature to sign-up with their respective organ donor registries. Facebook’s announcement follows reports from late Monday that the social network was getting ready to release a new life-saving tool.

If successful, Facebook’s organ donor push has the potential to help save the lives of the more than 114,000 people in the U.S. currently waiting for new kidneys, lungs, hearts, and other organs.

Courtesy ABC’s GMAIn an interview GMA co-host Robin Roberts asked why organ donation? Zuckerberg said that he was impressed by the way communities hit by tragedies such those recently in tornadoes Missouri and in Japan used Facebook to organize and find family.

“We figured is there anything we can do to help people solve other types of issues. Like all the people who need organ donations,” Zuckerberg told GMARead More

Facebook turns umbrella company via Instagram purchase

Facebook is acquiring photo-sharing app Instagram for approx. $1 billion

Facebook is acquiring photo-sharing app Instagram for approx. $1 billion Photo: Justin Sullivan/Getty Images

Mark Zuckerberg, Facebook’s 28-year old founder and chief, has found himself in a rare and enviable position. Now that his social network has been valued at $100bn, he can comfortably afford to wipe out any of its competitors with large purchase prices and lots of change to spare.

Instagram, with its 30 million users, the majority of which are young, (compared to Facebook’s ageing membership as its popularity grows amongst parents and grandparents) has been scooped up by Facebook for a mere one per cent of its market cap.

The move heralds a new era for the social network. Zuckerberg has personally pledged to not only keep the photo-sharing app open; he has said it will continue to work with other rival social networks, such as Twitter and location-sharing service Foursquare.

Using his own Facebook profile to announce the deal, which is the first of its size for the social network, Zuckerberg stressed that it would be business as usual for Instagram’s 30 million users: “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.

“We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.”  See Full Post

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