Shares of Facebook (FB) plunged over 9% today, ending the trading day at a price of $28.82 per share, making it the first time shares have closed below $30. Shares of Facebook are down 24% from their IPO price of $38 a share, and other than an early 20% pop on the first day of trading, the stock has been extremely underwhelming for investors.
And it’s about to get a lot worse for long-term investors. Put option volume for Facebook has been extremely strong, and this is a sign that investors believe the stock could drop further in price. And the company is now engaged in a public battle versus former advertiser General Motors, which generated significant buzz several days before Facebook’s IPO by announcing they would stop advertising on Facebook, citing an ineffective return on investment. According to Mashable, Facebook refused to allow GM to have full-page digital ads on profile pages. Additionally, Facebook executives are now publicly stating that GM botched their own ad campaign by not focusing on the appropriate measures and having lackluster content.
All of this bickering between Facebook and GM is keeping the two companies in the news, but not for good reasons. Nevertheless, you knew there was going to be a response from Facebook regarding GM’s decision to stop advertising with the company, because without advertising dollars, Facebook doesn’t exist.