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Monday, May 21, 2012

Facebook’s IPO: A Plummet?

On the day of its IPO, Facebook issued at $38 and went to a high of $45 before returning to near its issue price (closing at $38.23). On the next trading day, the price fell to about $34 in the early afternoon. This represents about 10% off the issue price. The Huffington Post headlined “Stock Plummets,” which must have been irresistible to anyone who had bought the stock. The Post was using the $45 high as its benchmark, from which the $34 price represents a 25% drop. As if that were a plummeting, using the 10% off figure would have made the self-aggrandizing headline too obvious. At the very least, the headline detracts from the credibility of the Huffington Post.

The full essay is at "Taking the Face Off Facebook."