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Shares of the social networking giant continued a precipitous plunge since the company’s much-hyped initial public offering. The stock notched a 10% drop Tuesday and has lost about a quarter of its value since going public May 18.
Facebook is now trading below $29, a stunning drop for the biggest tech IPO in history. And traders are placing bets that the stock will erode further.
Much of the slide Tuesday was because of a rush of options traders coming into the market. These trades offered investors a new way to speculate on the rise or fall of the company’s shares, and most of the bets indicated more drops are ahead.
The drop brings up the big question Wall Street’s been asking: How low can it go? The answer might not be known for a while.
Spokesmen for Facebook and Opera declined to comment. In April, Facebook surprised some analysts by spending $1 billion to acquire Instagram, a photo-sharing company.