Rampant 'short selling' by speculators pulling down Facebook shares values

Washington, May 25 (ANI): Facebook faces a growing threat from speculators, who are trying to earn a profit from the company's troubled flotation.

As more of Facebook's shares are available for borrowing, the ability for investors to bet against the company's shares has increasingly grown.

According to Data Explorer, which tracks data on short-selling, the firm's volume of shares available to borrow is rising as institutional investors allocate a portion of their Facebook shares to lending programmes that speculators can borrow from.

"There is strong demand to short the shares," The Telegraph quoted Alex Brog, as saying, who is an analyst at Data Explorer.

Data Explorer revealed that about 33 million shares, or almost 8pc of the shares Facebook sold in the flotation, have already been borrowed.

The news came amid a report that David Ebersman, Facebook's finance director, helped to decide to sell shares at the top of the range. That decision, alongside the move to lift the amount of shares sold by 25pc, explains the poor performance of Facebook's 104 billion dollars flotation so far, according to analysts.

Shares in Facebook were little changed at 32 dollars in afternoon trading on Wall Street. They remain 16pc lower than the 38 dollars when they were first sold for. (ANI)