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.
Varying degrees of drought are hitting almost two thirds of the limited arable land across Syria, Lebanon, Jordan, the Palestinian territories and Iraq.
Turkey deems Iranian gas too expensive compared with other suppliers like Russia and Azerbaijan, an assertion rejected by Tehran.
Satoshi Nakamoto, a name known to legions of bitcoin traders, practitioners and boosters around the world, appeared to lose his anonymity on Thursday after Newsweek published a story that said he lived in Temple City, California, just east of Los Angeles.
BP's exploration and production sharing agreement with Libya covers onshore acreage in Ghadames, near the border between Libya, Algeria and Tunisia, and offshore acreage in the central Sirte basin
There are discussions at high levels within the U.S. government on how to use U.S. natural gas resources
The judicial sources said on Thursday that prosecutors suspected the companies of working together on campaigns to favour Lucentis, including promoting it to local doctors
Scotland's Energy Minister Fergus Ewing offered to meet Shell to discuss the future of the oil and gas industry if Scotland votes to end its 307-year tie with England
European Commission President said that from a purely financial standpoint the crisis in Ukraine should not have much impact on the euro zone but there was potential for far greater instability
The rouble-traded MICEX lost 1.9 percent on the news to trade at 1,322.2 points. It had earlier traded in positive territory.
If tensions eventually escalate into economic sanctions, the single biggest point of vulnerability for the Gulf would probably be the Dolphin Energy pipeline carrying about 2 billion cubic feet of gas per day from Qatar to the UAE and Oman
The former Soviet republic is strategically important to Moscow as the main gas transit route to the European Union, Russia's biggest customer
Iran will soon receive a second installment of previously frozen assets which are being returned to it under an interim nuclear agreement with world powers
Economic growth jumped to 5.2 percent in the last quarter, but Romania remains the second poorest country in the European Union
Brent crude prices decreased by 1.8 percent, more than US$2 per barrel on Wednesday.
The southeast European country sets out to achieve price stability by increasing the share of private entities in its state dominated energy sector.
Premier Li Keqiang also said at the start of the China's annual parliamentary session, that the country's 2014 growth target will be kept at 7.5 percent, inflation at 3.5 percent and broad M2 money supply growth at 13 percent.