Facebook shares take a tumble as Google hits record high

Published:  25 Sep at 10 AM

Shares in social network giant Facebook took a tumble at the beginning of the week after the respected markets publication, Barron’s, released a story in which it claimed that the website’s stock is still greatly overvalued. Since May, when Facebook listed on the stock exchange, the value of its shares has dropped by 40 per cent.

Barron’s said it would advise investors thinking about putting money into Face book not to, adding that shares are not worth more than $15 each and might even be overvalued at that price.

Analysts are warning that the situation is unlikely to be improved for the tech company when employees are allowed to release shares onto the market on 29 October. On 14 November a further 777 million shares could flood the markets as employee options to sell come up which will put even more pressure on the price.

The overnight plunge of 11 per cent for Facebook came as Google saw its shares hit a record high. Stock price at the firm has been creeping up this year as it taps into key growth areas on the internet. Google remains the net’s number one search engine and has also been successfully growing its Android OS and YouTube platform.

Google shares hit $748.90, and according to Citigroup are likely to continue rising over the coming year.