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Facebook stock plunges 9.1% as doubts rise again

7:24 AM, Sep 25, 2012   |    comments
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(USA TODAY) - Facebook stock ended trading Monday 9.1% lower at $20.79 a share, as investors reacted to reports of a security bug and renewed their worries about the company's future.

Shares initially suffered Monday following a weekend report in Barron's, the weekly newspaper published byThe Wall Street Journal, claiming shares of the No. 1 social networking stock are overvalued and could fall to $15 a share.

Later in the day, there was discussion on online news sites, alleging private messages were appearing online on users' public 'wall' pages. At one point, shares were trading 10% lower for the day.

"A small number of users raised concerns after what they mistakenly believed to be private messages appeared on their Timeline," a Facebook representative said in an emailed statement. "Our engineers investigated these reports and found that the messages were older wall posts that had always been visible on the users' profile pages. Facebook is satisfied that there has been no breach of user privacy," the emailed statement said.

The stock was supposed to get a boost Monday, after being added to the obscure Nasdaq Q-50 index. The Q-50 index is a list of the stocks likely to be added to the widely watched Nasdaq 100 index, a collection of the 100 most valuable non-financial stocks trading on the Nasdaq.

However, bears on the stock continue to say that Facebook is actually worth $15 a share or less. The stock got a lift last week on the coattails of positive comment from CEO Mark Zuckerberg earlier in the month.

Shares, though, have been a disaster for investors who piled into the initial public offering that debuted May 18. Shares are now about 45% below the IPO price of $38 a share.

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