The social-media company’s stock price was down nearly 8% to about $21 in mid-afternoon trading after a weekend cover story in the financial weekly said Facebook might only be worth $15. Shares went public in May at $38. Many analysts and investors don’t appreciate how much stock the company has awarded its employees for their compensation, Barron’s writer Andrew Bary says. “Facebook issued $1.4 billion of restricted stock in 2011, or nearly $500,000 per employee. So far this year, the company has doled out $1 billion of restricted stock.” All told, the stock-based compensation could amount to 20 cents a share — a big deal for a company that has been selling for about 47 times its expected 2012 profit of 48 cents a share, and 36 times the 2013 consensus forecast of 63 cents a share in earnings. Bary says tech analysts often ignore that expense. “This dubious approach to calculating profits is based on the idea that only cash expenses matter. That’s a fiction, pure and simple. As Warren Buffett has said, companies could take this to the extreme, pay all their expenses in stock and claim to have no costs.”
Separately, Pivotal Research Group’s Brian Wieser lowered his Facebook price target by $1 to $32 a share due to “slower-than-we-previously-expected launches” this month of the Facebook Ad Exchange. The program enables companies that monitor Web users’ search activity to buy Facebook inventory in real time and post targeted ads to these people when they visit the social network site.

Here’s my advise for Facebook….although I don’t use Facebook or twitter….people have shown me what it’s about….what I’ve seen what people do on there I did not like, and that maybe the reason for people not buying the stock shares because they don’t like what they see on Facebook also, so it lowers your value based on what the idiots do on your site…..
Start monitoring your site closer, clean up garbage people on there….the riff raff go on there and face book that they had tuna fish sandwich for lunch yesterday, or use the site to gold dig and inappropriate things…..there are a lot of low class trash that face book, and that turns the investor off and lowers your value…..so clean up your site, and make it classier and more professional….ban garbage traffic and what they’re allowed to post or not allowed to post on there….so people can net work in a classy , profeesional manner…..as opposed to right now it’s like a jungle on there, anything goes…..mostly garbage people jerking off on there…so clean them up and make your site classier for net working, then your investors will come back…..good concept, except the riff raff on there are destroying your image with their actions, behaviors and kill your stock value!!! Clean them out and clean up your image!
I don’t think you have the slightest clue as to what Facebook is. Not sure what rock you have been hiding under since 2006. Facebook thrives in numbers and it’s users are it’s success. Like all sites with high traffic, Facebook makes a large portion of it’s profits off advertising.
Have you seen a television commercial that did not apply to you in the least bit? Facebook utilizes factors in your life to aggregate ads that are relevant to you, which is something network advertisers wish they could do. Like all social networking databases, at some point the ads become distracting and a nuisance. Facebook will have to generate more revenue due to it’s falling stock index to attract new investors. That combined with constant social start-up competition in simpler formats will be the fall of facebook.
That time is coming, and for the sake of humanity I hope it comes soon. Our future generation’s social skills are in decline and the longer social-site-conglomerates exist the more we turn into a completely impersonal hermit society. I can’t even remember the last conversation I had where the individual I was speaking with was totally comfortable. It seems we as a nation are becoming more and more used to hiding behind devices.
Though the sudden drop in the value of Facebook’s stock price was alarming to come investors, there are ways to see the change in a sunnier light. While shareholders continue to flock away from the falling stock and leave a dent in the remaining stock value, how can we see this exodus as a good thing? Facebook is now trading at around five percent, around the twenty dollar mark, which marks a fifty percent drop from the original price.