Facebook's stock plunge: Is now the time to buy?

Facebook's stock took a nose dive to a new low of just under $20 a share, making it either a sweet deal — or a trap

Facebook's falling stock price is seen on a screen reflected in the window of the Nasdaq building in New York City, Aug. 16.
(Image credit: REUTERS/Lucas Jackson)

On Thursday, Facebook's shares dropped to their lowest level since the social media giant went public in May, as investors who were locked into holding 271 million shares became eligible to sell — and sell they did. The stock, which debuted at $38 a share then briefly peaked at $45 a share, slid below $20 a share for the first time, closing at $19.87. That was bad news for CEO and founder Mark Zuckerberg, whose fortune shrank by $600 million, to a still-hefty $10.2 billion. But while Zuckerberg can't sell his stock unit until the end of the year, any investor can now snap up a piece of Facebook, says Lee Brodie at CNBC. And several analysts say that "if you don't buy now, you'll kick yourself in days to come." At just below $20 a share, is it finally time to buy Facebook stock?

Buying now is a no-brainer: So "Facebook, the one-time darling of the social media investment community has fallen from grace," says Sherli Looi at Forbes. That's great: At $20, smart investors have a great opportunity to buy into a promising money-maker at a bargain price. "What is a fair value for Facebook? The answer can range between $30 or $55 a share," depending on whether the company captures "a measly 2 percent share of the global ads spend­ of $600 billion per year, or a more reasonable 5 percent share." Either way, the future looks bright for Facebook and its investors.

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