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 to rock the stock, analysts say.
Facebook has lost more than 40% 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% 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.
Other tech companies have faced similar questions with burgeoning start-ups such as Groupon already facing increased competition and greater scrutiny of profitability.
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reporter
Park Sae-jin
swatchsjp@ajunews.com