World Bulletin / News Desk
Facebook Inc's shares slid 6.2 percent to another record low on Tuesday, diving for the third straight day since lackluster results showed decelerating user growth and revived doubts about its ability to sustain its rich valuation.
A sobering report from Bernstein Research, combined with online chatter about the potential proliferation of automated Facebook accounts and a looming sell-off of employee shares next month all conspired torock the stock, analysts say.
Facebook has lost more than 40 percent of its value since becoming on May 18 the first American company to debut with a value of more than $100 billion.
The stock, down 6.2 percent at $21.71, still trades at more than 40 times forward earnings, versus Google Inc's 15.
Investors have punished the stocks of the No. 1 social network and other consumer-focused Internet companies such as Zynga Inc, questioning their ability to sustain growth and maintain lofty valuations.
Last week, Facebook reported results but offered no outlook or forecast for the year, disappointing investors who had hoped for affirmation of its growth prospects.
Wall Street is also bracing for a potential deluge of hundreds of millions of shares after Aug. 16, whenFacebook employees can sell their company-awarded shares for the first time.
"It's a combination of the Bernstein note, and partly complaints about the Facebook bot. Lockups are also causing pressure on shares today," said analyst Herman Leung of Susquehanna Financial Group, which owns and is a market maker in Facebook shares.
"People are just wondering what the next update is, and there's more headwinds than not. But the long-term story still feels intact."
Facebook's IPO was to have been the culmination of breakneck growth for the company that Mark Zuckerberg started 8 years ago in his Harvard dorm room. Instead, the May 18 Nasdaq debut was marred by trading glitches and accusations of inadequate disclosure.
On Tuesday, UBS blamed a 349 million Swiss franc ($360 million) loss from Facebook's botched debut on exchange operator Nasdaq, becoming the latest financial investment institution to report a hit from the first day of trade.
UBS said orders for the stock had been entered multiple times due to a systems failure.
Compounding Facebook's woes was a Tuesday report from Bernstein Research analyst Carlos Kirjnerthat valued its display advertising business at just $19 a share, half the company's $38 IPO price.
Kirjner set Facebook's 12-month target price at $23, placing a $4 premium on what he said was untapped advertising potential around the company's innovative social graph. But, that potential remains "yet to be defined and built," he wrote.
Kirjner on Tuesday upgraded Facebook to market perform, but suggested that the lockup's expiry, which could unleash up to 211 million shares, will weigh on the stock.
The size of the current float could be nearly tripled by November, as more and more employees begin tosell, Kirjner warned.
Finally, an Internet startup late on Monday publicly called into question Facebook's user-number claims, igniting debate among industry executives and on the Internet.
A commerce site called Limited Run, in announcing that it was deleting its Facebook page, claimed that 80 percent of its ad-clicks on Facebook came from "bots" or automated accounts, and only a fifth from genuine users.
"We're currently investigating their claims," said an external spokeswoman for the social network.
Ursula von der Leyen held talks with her Saudi counterpart, Deputy Crown Prince Mohammed bin Salman, on boosting the "excellent bilateral relations" between the two countries, the mission added.
Most analysts predict president Mario Draghi will extend an 80-billion-euro ($86-billion) per month bond-buying scheme beyond the current March deadline at his press conference.
A record-setting wave of Chinese investment abroad has fuelled concern in Beijing over capital flight, reckless spending overseas, and the yuan's fall against the US dollar.
The deal is part of a broader privatisation drive and comes despite Moscow being mired in Western sanctions over the crisis in Ukraine that have played a major part in plunging the country into recession.
Germany’s ambassador to Ankara says German companies operating in Turkey should think about tomorrow
After months of disagreement, OPEC members last week hammered out a deal to cut oil output for the first time in eight years.
Ali Shareef al-Emadi predicted growth of 3.4 percent in 2017, in line with an International Monetary Fund estimate and up from a projected 3.2 percent this year.
"Many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system," Carney said in a speech at Liverpool's John Moores University.
European stock markets are also set for a weak start, with Italy underperforming as investors brace for turbulence and political crisis in the euro zone's heavily indebted third-largest economy.
The euro tumbled on Monday after Italian Prime Minister Matteo Renzi said he would resign as he conceded defeat in a referendum over his plan to reform the constitution
Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.