Facebook Has Lost About $35 Billion In Value Since IPO As Shares Dip Below $29
Pain, pain, and more pain for Facebook's stock. Facebook sunk into the $20s for the first time today, declining about 9 percent as options trading started. The decline also came a day after a third wave …
Context & Ripple Effects
Just over a week into life as a public company, Facebook has erased roughly $35 billion in market value, with shares falling about 9 percent below $29 for the first time on the day options trading opened. The breadth of the pickup — the Wall Street Journal, the Guardian, the Atlantic, VentureBeat and others all carrying the story the same day — marks this as the moment the IPO went from a celebration to an open question about the company's public-market valuation.
Two threads frame the selloff: the timing of the dip against the start of options trading, and a product-vs-revenue standoff, since Facebook is holding firm against demands from big-spending advertisers like GM to run ads that interrupt the user experience. A rumored, unconfirmed $100m acquisition of Face.com circulating the same week signals the company is still buying capability rather than retrenching.
First-order effects
- Options trading opening the same day shares dropped 9 percent gives institutions their first liquid hedging and shorting instruments on Facebook, converting private doubts into tradable downside pressure.
- Mark Zuckerberg now manages a company whose stock is down roughly $35 billion while publicly refusing the ad formats that big spenders like GM say they want — a direct tension between product principles and revenue expectations.
Second-order effects
- Employees holding equity compensation face paper losses weeks after joining or vesting into a public company, putting retention pressure on a firm whose hiring case rested on stock upside.
- If the ad-format refusal holds, Facebook must close any revenue gap through new surfaces — the trending videos and trending articles features added to the news feed in May point toward feed-native monetization rather than interruption ads.
Third-order effects
- A founder-controlled company absorbing a $35 billion drawdown without changing its product posture tests whether dual-class-style insulation lets consumer internet firms ride out public-market discipline or eventually bends strategy toward Wall Street.
- The episode becomes a cautionary benchmark for the next wave of consumer web listings: pricing an IPO on user scale — here, the world's third-largest population behind India and China — rather than current monetization invites exactly this repricing.
The trend: Consumer internet companies entering public markets at valuations set by user scale rather than revenue are discovering that founder control buys time, not immunity, from market discipline.