Share
Explore BrainMass

Percentage change in shareholder wealth as stock prices change

Facebook sold shares to investors at $38 each in its IPO. One year later, its stock price was hovering around $26. What was the percentage drop in Facebook shares in its first year as a public company? Just after the IPO, Facebook's CEO, Mark Zuckerberg, owned 443 million shares. What was the total value of his Facebook stock immediately after the IPO and then again one year later? How much wealth did Zuckerberg personally lose over the year?

Solution Preview

SOLUTION:
Dear Student,
Please take a look at the attached document that allows me to use fractions to better explain the problem.

Part One:
To find the percentage change in any value you need the find the different between the earlier and the later figures and ...

Solution Summary

Facebook sold shares to investors at $38 each in its IPO. One year later, its stock price was hovering around $26. What was the percentage drop in Facebook shares in its first year as a public company?

$2.19