Facebook shares fall more than 10 percent on second day of trading

facebook shares fall more than 10 percent on second day of trading facebookipoNow that the hype is over and economic realities are setting in, the bloom seems to be off the Facebook IPO rose. How else to explain the fact that shares in the social network giant fell by 11 percent on the second day of trading while the overall Nasdaq index – and other big-name tech stock – went in the other direction?

Shares closed trading at $34.03, down from the initial launch price of $38, bringing the market value of Facebook as a whole down a dramatic $10 billion. Exactly who, or what, is to blame for the drop is the subject of much discussion. According to Doug Kass of Seabreeze Partners Management, it’s the fault of the overall market: “Facebook’s perceived problems are more likely due to market externalities than anything specifically related to [the company]. From my perch, Facebook’s IPO came at a terrible time in which the eurozone showed tremendous strain. Greece, in particular, weighed heavily on the markets and on Facebook.”

That may be true, but those same externalities don’t seem to be affecting other stock in the same manner as Facebook; not only did the Nasdaq close up 2.46 percent with US stocks coming back from their worst week in a year, but Apple stock rose almost 6 percent by the end of the day. Wedbush Securities analyst Michael Pachter had an entirely different culprit in mind, telling reporters “The underwriters completely screwed this up,” and suggesting that Facebook’s bankers, Morgan Stanley, should have recommended the release of fewer shares at launch.

The weakness of the stock is causing concern amongst analysts over the strength of future social media IPOs, with Tom Taulli, author of the book High Profit IPO Strategies telling the Wall Street Journal, “If Facebook can’t skyrocket and do well, then what can you expect from anything smaller? …Facebook could be a sign we are reaching a top in social media, and need to go on to something else, like mobile industries.” It’s a feeling echoed by IPODesktop.com president, Francis Gaskins, who claimed that “the retail enthusiasm bubble has been popped. The thrill is gone.”

For now, the question is whether things will get worse for the company as the stock moves toward a week of release. “The truth is that in the hi-tech sector, nobody really knows what the predominant product might be five or ten years from now,” says John Lonski, the chief economist at Moodys Capital Markets Group. “When you start the downward momentum it can be difficult to turn it around unless there is a positive surprise pertaining to the company itself.”

Apparently, that kind of positive surprise will have to be more than just the company’s founder getting married to his longterm girlfriend.

Social Media

Three million people quit Snapchat after the redesign

After a million users signed petitions to get the old Snapchat back, the network's user count is showing the early results of the changes with a three-million-user drop in daily active users.
Podcasts

Galaxy Note 9 hands on, MicroLED vs OLED, Apple hacked, Robot actor

On today's episode: We have a hands on look at Samsung's Galaxy Note 9 and what makes it different than other phones. Would you rather have an OLED, or MicroLED television? Caleb Denison will tell you what the differences are. Plus, Apple…
Home Theater

Cutting the cord? Let us help you find the best service for live TV streaming

There's a long list of live TV streaming services available to help you cut the cord and replace your traditional TV subscription. Each is different in important ways, and this guide will help you find the best one for you.
Photography

Capture life in every direction with the best 360 cameras

While 360 cameras are still a new technology, that doesn't mean there's not a few that are worth a look. Whether you want to shoot from the middle or just need a simple, affordable option, here are the best 360 cameras on the market.
Movies & TV

The best shows on Netflix in August, from ‘Arrested Development’ to ‘Dark Tourist’

Looking for a new show to binge? Lucky for you, we've curated a list of the best shows on Netflix, whether you're a fan of outlandish anime, dramatic period pieces, or shows that leave you questioning what lies beyond.
Social Media

Facebook wants to help you find a mentor with its latest Groups feature

Facebook is designed for connecting to other people -- so why not mentors? Today, Facebook launched a program inside Groups that allows for two users to go through a mentorship program together.
Features

The numbers don’t lie: Facebook is faltering. So what will eventually replace it?

Facebook is faltering, and the data prove it. User growth is slowing, employee outlooks are dipping, and young people are looking elsewhere. But for Facebook to fail, an alternative must arise. Who will it be?
Social Media

Facebook’s less cluttered friend list feeds are no more

Facebook friend feeds created a more curated news feed -- but not anymore. Facebook discontinued the feature, saying it wasn't widely used. The move will help the network focus on improving the news feed, the company says.
Photography

Starting a vlog? Here are the best cameras to buy

Any camera that shoots video can be used to vlog, but a few models stand out from the crowd thanks to superior image quality, ergonomics, and usability.
Photography

For Monaris, it’s a photography career launched on an iPhone and Instagram

On Instagram, she's known just as Monaris. But street photographer Paola Franqui has built a following largely with an iPhone and a smile. We sat down with her to talk photography, style, and Instagram, of course.
Mobile

Marco? Polo! Let's explore the app known as the 'video walkie-talkie'

Marco Polo has been dubbed the "video walkie-talkie," but how does the video messaging app stack up against competitors like Snapchat and Instagram? From unique filters to personalized video messages, we explore the Marco Polo app.
Social Media

Kids can now initiate a friend request on Messenger Kids by using a password

Facebook's messaging app for the under-13 crowd required parents, not kids, to initiate the process of adding a friend. Now kids can start the process by using a unique passphrase -- a feature that still requires parental approval.
Photography

The Nixplay Iris might just make digital picture frames cool again

The digital picture frame's popularity has fizzled because of time-consuming updates and low quality -- but can a Wi-Fi connected frame change that? The Nixplay Iris is an 8-inch smart digital picture frame that wireless updates photos.
Social Media

Instagram hackers are changing account info into Russian email addresses

Have you logged in to your Instagram lately? A hack circulating this month has Instagram users locked out of their accounts because a hacker changed all the profile data, according to a report.