The Hoodie Factor: Facebook Breaks $20, Options Say $15 Is Next

Facebook, Inc. (NASDAQ: FB) is obviously about as silly of a company as a group of billionaires could run.  That is what the market is telling you.  Facebook as a growth company should have no real care about what Mario Draghi or other policymakers are up to. Shares have not just hit a new low.  They have broken under the $20.00 mark for the first time since its initial public offering.  The company just cannot catch a break and each time that CEO Mark Zuckerberg or others make comments the stock only gets sold off even more.

Facebook shares have traded over 39 million shares as of 2:00 PM EST and the drop of $0.90 is actually down by 4.3% to $19.98.  Shares hit a low of $19.91 earlier today and the prior post-IPO range had been $20.84 to $45.00.

It was just in recent days that we saw that trading was active in the PUT options in August down to the $19 strike price.  Now that is down to the $18 strike price for August.  What is bad is that if you go out to the September options expiration the PUT option volume is active down all the way to the $15 strike price.

Facebook keeps tanking, and options traders are speculating that Facebook shares are heading even lower.  This is what happens when you get an eccentric CEO whose greatest piece of garb is bringing a hoodie to Wall Street.

Also, let’s not forget about Zynga, Inc. (NASDAQ: ZNGA) where shares hit a new low and are down 3.7% at $2.71 today. Global X Social Media Index ETF (NASDAQ: SOCL) is down 1.5% at $11.90 and shares hit a new low of $11.88 today.

JON C. OGG