Guiding consumers since 2009

Facebook shares drop to $26

By Staff Writer

This week Facebook’s shares plunged to a record low of $26.80 (R222.7) since it began trading at $38 (R314). According to Mark Wilkes, trader at global trading platform GT247.com, at $38 a share, Facebook was overpriced on its listing. “The issuers at the time of the initial public offering got too greedy and tried to force the price much too high. The original price was in the mid twenties and they thought they could sell masses of stock into the public’s hands,” he said.

 

Much hype surrounded Facebook, which boasts 900 million users, when it listed on the Nasdaq last month. But its share price fell soon after the listing when doubts surrounding its money-making abilities hit home. A poll released by Reuters/Ipsos showed that, 34% of the social network’s users are spending less time on it than they were six months ago compared with 20% that said they were spending more. It also found that only one in five people bought products on the website through advertising.

 

South African investors were only marginally exposed to Facebook through global media company Naspers. “We could invest indirectly via Naspers which has a holding in Tencent, which has a holding eventually in Facebook. South Africans could also have gained exposure through their offshore accounts,” said Wilkes.

 

Wilkes added that the timing of the listing was also poor. “They chose an awkward time in the markets as well because their listing coincided with a weak undertone in the market. People were anxious to pick up even a so called fantastic stock, such as Facebook, while [markets in the] United States and Europe are struggling. It all added to the negative sentiment,” he said.

Recent Articles

Featured Are you entitled to your spouse’s pension after divorce?

Divorce means more than just parting ways with your partner. It may also involve parting ways with your assets. The Divorce Act states that your retirement fund forms part of your assets. This means that it will be considered when dividing up your assets.

Retrenched – what payments are you entitled to?

In the current struggling economic climate, retrenchments are a regular occurrence and not everyone survives the cut. If you find yourself on the receiving end of retrenchment you may have questions about the payments that are due to you.

Do you want to settle your debt?

You may be considering settling your credit account, whether it’s a credit card or various store accounts, now may be as good a time as any. This especially if you have saved, or you received a tax return or salary bonus. 

Can you afford a personal loan?

Taking out new debt is not always a choice. However, if you’re not pressed by a medical emergency or an unforeseen disaster, it’s worthwhile considering whether you can actually afford it. But what does it mean to “be able to afford a personal loan”? What percentage of your income should you not exceed dedicating to it? 

Deals

Builders Black Friday Special

Price: R5000
When: Until 29 November 2019
Where: Online

Café Rousse Monday Special

Price: Available on request
When: Mondays
Where: Nationwide

Skye Bar Mojito Special

Price: R55
When: Until 31 December 2019
Where: Johannesburg