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Facebook stock drops below $30, has lost 24 percent

NEW YORK — Facebook's stock has fallen below $30 for the first time since its much-awaited public debut this month.

The stock fell $3.07, or 9.6 percent, to close at $28.84 on Tuesday. That's down 24 percent since its public stock debut. It went as low as $28.65 earlier in the day.

Facebook began trading publicly on May 18 after one of the most anticipated stock offerings in history.

The site, which was born in a Harvard dorm room eight years ago and has grown into a worldwide network of almost 1 billion people, was supposed to offer proof that social media is a viable business and more than a passing fad.

Facebook's initial public offering of stock priced at $38 raised $16 billion for Facebook and some of its early investors. It had valued the company at $104 billion — more than Amazon.com Inc., at $98 billion, at the time.

And the company, along with the investment banks that led the IPO, is the subject of at least two shareholder lawsuits. They allege that analysts at the large underwriting investment banks cut their financial forecasts for Facebook just before the IPO and told only a handful of clients. Morgan Stanley has declined to comment. Facebook calls the lawsuits "without merit."

Wedbush analyst Michael Pachter said Facebook's stock has been hurt by what he called "near-term issues" that include the Nasdaq glitches, an oversupply of stock that was being offered and the allegations of selective information disclosure.

But he rates the stock "Outperform" and has a 12-month target price of $44.

"Facebook has built a huge moat between it and its competitors, and we endorse Mr. Zuckerberg's mission," he wrote in a note to investors Tuesday, referring to Facebook CEO and founder Mark Zuckerberg.

With the latest drop, Facebook's value is about $79 billion.

Facebook stock drops below $30, has lost 24 percent 05/29/12 [Last modified: Tuesday, May 29, 2012 10:00pm]
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