Facebook has just begun trading for the first time as the latest member of the exclusive Nasdaq 100 Index, stirring hopes among investors that the social media site’s stock value could be in for another lift.
However, things didn’t pan out that way immediately, with Facebook’s stock price tumbling down to $27.60 a share, down 1.4% from its starting point this morning.
The social media starlet is the newest addition to the closely-watched Nasdaq 100, which indexes the top 100 stocks trading on Nasdaq value-wise, outside of financial company stocks. Last week, it was revealed that Facebook would be added to the list in place of Infosys, an outsourcing firm that will now be floated on the New York Stock Exchange instead.
The announcement has led to speculation among Nasdaq 100 investors that Facebook’s addition might lead to more stocks being bought up, since exchange traded funds and mutual funds that reflect the Nasdaq will also need to buy these shares.
The Nasdaq 100 describes itself as the benchmark for more than 7,100 investment products across the world, with a total invested value of some $1 trillion, which means there is a significant pool of potential buyers that might be interested in buying up Facebook’s shares.
For Facebook, it’s inclusion in the Nasdaq 100 is a most timely one. The social media firm has only just begun to recover from a dramatic fall in its share price that followed its initial IPO in May. Facebook’s share price as of Tuesday was $27.57 a share, 57% above its lowest point but still some 27% below its starting point of $38 a share. Analysts suggest that Facebook’s recovery is due to the progress it has made with making money from its mobile platforms, while it has also been helped by the confidence of its employees, most of whom decided to hold onto their shares following November 14’s massive unlock that saw 777 million shares freed up to be sold.
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