Mark Zuckerberg’s fortune just dropped over $2 billion dollars as shares of Facebook stock dropped below their initial $38 IPO price.
According to Bloomberg, Facebook shares sank 11.3 percent to $33.90 at 12:37 p.m. in New York, after declining as much as 13.7 percent to $33. Zuckerberg's stake is valued at $17.1 billion.
Fin24.com noted that pre-marketing trading had seen heavy selling of the stock, which was supported just above its $38 listing price by the underwriters at the major banks who bought shares ahead of the flotation.
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However without the support of underwriters the stock dropped nearly 10 percent of their worth within minutes of going on sale today.
Henry Blodget, a former Wall Street analyst, told Fin24 he believes that a fair value for the company would be somewhere between $16 and $24 a share, depending on its results. That would value Facebook between $50 billion and $85 billion, far less than the $104 billion that the $38 share price put on it.
Reuters reported that several other social media sites suffered perhaps because of Facebook’s new stock. LinkedIn, Yelp and Zynga (a partner site of Facebook’s) all plunged for the third consecutive day early in Monday's session.
One analyst told Mercury News, this drop in Facebook’s stock may actually be a good thing. Brian Wieser From Pivotal Research Group said, “I'm kind of glad there wasn't a big pop. Had this thing traded up 50 percent, it would just make the bar that much higher in terms of what the company has to deliver in revenues to avoid disappointing investors."
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