Facebook shares down to new lows
04 Aug 2012
Facebook has said in a regulatory filing that as many as 83 million accounts on its social networking website might be false or duplicate user profiles. Its shares were down to new lows yesterday, dropping 4 per cent to close at $20.04 on the Nasdaq.
It said this week that 8.7 per cent of its 955 million monthly active users may be duplicate or false accounts, after it estimated in May that 5 to 6 per cent were such accounts.
According to Facebook Inc about 4.8 per cent of its active user accounts may have been duplicates as of 30 June, while misclassified accounts likely represented around 2.4 per cent of the total. These were accounts for pets or businesses that people set up as they would set up profiles for humans.
Accounts that Facebook termed "undesirable," such as those used for spamming, represent around 1.5 per cent of the total and the news came as another blow to Facebook stock, which is getting closer to losing half of its value since its highly anticipated public offering on 18 May.
A further 5 per cent decline from yesterday's close would bring it to $19 - half of its initial offering price of $38, after the stock fell to as low as $19.82 during yesterday's session.
Facebook said, the ''undesirable'' accounts represented user profiles that it determined were intended for use that violated its terms of service, such as spamming.
