Facebook's Stock: What Should It Cost? | WAMU 88.5 - American University Radio

NPR : News

Filed Under:

Facebook's Stock: What Should It Cost?

As the downward pressure continues on the price of Facebook's newly issued shares, let's see what our collective financial wisdom tells us.

The initial public offering was priced at $38 a share. After technical snafus on Friday, and only thanks to lots of help from Facebook's bankers, that's about where the stock settled its first day.

Monday, it closed down 11 percent, at $34.03.

This morning, it was mostly trading between $31.50 and $33.50. This afternoon, with about an hour to go in the trading day, the stock was at $31.50. At the close, it was at $31.12 — down almost 9 percent from Monday.

As Business Insider has pointed out, at $38 Facebook's shares were priced "at about 65 times consensus 2013 estimated earnings per share" for the social media giant. Compare that to Apple's stock, which trades at about 10 times projected earnings per share.

So, the question is:

Meanwhile, Nasdaq has conceded that it made mistakes on Friday when Facebook shares hit the market and that many would-be investors got burned when they couldn't buy or sell the stock at the prices they wanted. The exchange "on Monday tapped the Financial Industry Regulatory Authority to sort through requests from brokers seeking for the exchange to make up losses taken on Facebook trades, a process that could take weeks," Dow Jones Newswires writes.

(Reminder: Our questions are questions, not surveys of public opinion.)
Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Why Are Theater Tickets Cheaper On The West End Than On Broadway?

In London, a matinee ticket for Matilda costs about $60; in New York, it's $137. What's going on? The West End has weaker unions and subsidized theater, while Broadway has amenities.
NPR

Why Your 'Small-Batch' Whiskey Might Taste A Lot Like The Others

A food blogger says dozens of distilleries are buying rye whiskey from a factory in Indiana and using it in bottles labeled "artisan."
NPR

House Approves $16 Billion Plan To Improve Health Care For Vets

The Senate is expected to pass the measure this week. It would expand government programs and provide funds for vets who are unable to access VA services to see private doctors.
NPR

Can Pinterest Compete With Google's Search?

Pinterest has created a database of things that matter to humans. And with a programming team that's largely been hired away from Google, the company has begun offering what it calls "guided search."

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.