FACEBOOK SHARES retreated to a new low yesterday, extending losses from the worst-performing large initial public offering from the past decade.
The stock fell as much as 5.7 per cent to $30.10, slipping below the previous low of $30.94 on May 22nd. Facebook made its debut on May 18th after underwriters sold shares at $38. Facebook options trading began yesterday, with volume for puts exceeding call trading by 1.2-to-one in early trading.
More than 44,000 puts giving the right to sell traded. June $30 puts were the most-active contracts, followed by June $34 calls and July $25 puts.
“A lot of people are trying to trade the stock on the basis of those expectations,” Brian Wieser, an analyst at New York-based Pivotal Research Group, said. “Options will be a very robust marketplace, with respect to Facebook.”
The IPO, which set a record for tech companies by raising more than $16 billion, produced the worst five-day return among the 10 largest US deals of the past decade.
Based in Menlo Park, California, and Morgan Stanley, its lead underwriter, have faced criticism for boosting the number of shares sold and the asking price. – (Bloomberg)
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