A weekend cover analysis in Barron’s pegs Facebook stock as worth only about $15 a share, sending the stock down by around 6 percent on Monday to $21.26. A Barron’s analysis over the weekend that said Facebook stock is worth only about $15 sent shares down about 6 percent in early trading on Monday.
The cover story says that Facebook remains too pricey, even at levels that are more than 40 percent below its May initial offering price of $38.
It points out that Facebook shares trade at 47 times the social networking giant’s projected profit for this year of 48 cents a share and 36 times next year’s projection of 63 cents. Both Apple and Google, meanwhile, are trading at just 16 times their estimated 2012 earnings.
It also says that lockup periods that have prevented some employees from selling their shares are ending in the next two months and could keep the stock down. There are reportedly 234 million shares that could be sold on Oct. 29 and 777 million on Nov. 14.
The stock traded as low as $21.26 on Wall Street on Monday morning after closing Friday at $22.86.
The lowest Facebook stock has traded until now is $17.55 and it had been on an upswing before Monday’s drop.