Facebook shares slump to new lows

Facebook shares slumped to new lows last night, as speculators placed negative bets on the social network's business outlook.

The shares closed down a further 9.6 per cent to end the day at $28.84, now almost one-quarter below the $38 at which new investors bought in to the company's stock market flotation two weeks ago. Yesterday was the first day's trading for options on Facebook shares, financial derivatives that allow speculators to wager a relatively small sum to achieve the same result as if they bought or sold large numbers of Facebook shares. It was the busiest first day for a new options contract in history.

Facebook shares have been on the slide since it was revealed that the company's investment banks secretly cut their forecasts for advertising revenue on the social network.