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Facebook shares hit record low, slide under $20

Wall Street Kool-Aid leaves bitter aftertaste

Facebook has hit a new milestone and we are not talking about a billion users. The social networking giant saw its share slide under $20 for the first time since its overhyped IPO in May.

On Thursday FB closed at just $19.87, almost 50% down from the IPO price set at $38. The latest round of selling was triggered by lockup expirations. Many early investors were not able to unload their stock for 90 days after the IPO. It seems that at least some of them were eager to do so.

Worse, many investors still can’t sell their stock, but the restrictions should be gradually lifted towards the end of the year and we will see more than 1.4 billion additional Facebook shares on the market, nearly tripling the amount of shares available for trade, Reuters reports.

Sadly there is no end in sight and quite a few small investors probably got burned in the overhyped and disastrous IPO. We said it once and we will say it again, Wall Street needs to start doing less coke and more math. The tech press and many investor blogs were sounding warnings months ahead of the IPO, to no avail.

In fact, the stock is performing even worse than many naysayers expected. Many punters who said the stock should trade in the low twenties were dismissed as too pessimistic, but now they are proving spot on, if not even overly optimistic.

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