By Benjamin Pimentel, MarketWatch
SAN FRANCISCO (MarketWatch) ? Shares of Facebook Inc. closed with a solid gain Friday, but it wasn?t enough to keep the stock from falling for a third straight week.
Facebook?s /quotes/zigman/9962609/quotes/nls/fb FB +3.00% ?stock traded up 3% to close at $27.10, and briefly was poised to erase the week?s losses. But the stock ended the week down 2.2%.
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Dig into the theories and conjecture about the deeper meaning of Facebook's embarrassing performance after the initial public offering, and you can at least gain some insight into the market and investor behavior, Chuck Jaffe reports.
The shares have dropped 29% from the social-media service?s initial public offering price of $38, and have yet to end a week in the green. Read story on Facebook and shrinking social-stock valuations.
But the stock?s weekly rate of decline has eased.
The stock shed $6.32, or almost 17%, in its first full week of trading. It then gave up $4.19, or 13%, last week. Facebook slid 62 cents this week.
?The risk return for shorts has probably diminished at this point,? JMP Securities analyst Mark Harding said in a phone interview.
?We?ll probably see some kind of bottoming out and reaching a level where people can get their hands around valuation,? he added.
In fact, Facebook got a lift Friday from a comScore blog post, which said data to be released next week shows that Facebook ads are more effective than investors think. Read MarketWatch First Take on comScore's Facebook data.
Facebook has been hit with negative reports on the effectiveness of its ads, highlighted by the decision of General Motors /quotes/zigman/1466682/quotes/nls/gm GM +0.92% ?to stop buying advertising on the site.
Facebook CEO Mark Zuckerberg?People are feeling a bit more encouraged about it,? Harding said, referring to the expected data from comScore. ?If we have some data points on the effectiveness of the ads, that would counteract some of the more negative news.?
In fact, he said, word of the upbeat comScore report turned out to be good news for other social-media stocks.
Shares of Yelp Inc. /quotes/zigman/9021597/quotes/nls/yelp YELP +12.10% , LinkedIn Inc. /quotes/zigman/5131883/quotes/nls/lnkd LNKD +2.26% ?, Zynga Inc. /quotes/zigman/7212269/quotes/nls/grpn GRPN +1.32% ?and Groupon Inc. /quotes/zigman/7212269/quotes/nls/grpn GRPN +1.32% ? also posted gains on Friday.
Facebook?s stock has struggled ever since the company?s controversial IPO. On Friday, CNBC reported that UBS AG /quotes/zigman/411392/quotes/nls/ubs UBS -0.51% ?plans to sue Nasdaq OMX Group Inc. /quotes/zigman/86035/quotes/nls/ndaq NDAQ +0.05% ?over losses incurred from glitches during Facebook?s trading debut.
On Friday, Facebook rolled out its App Center where users can access social apps, which included features for downloading apps to mobile devices.
/quotes/zigman/9962609/quotes/nls/fb
US : U.S.: Nasdaq
Volume: 38.00M
June 8, 2012 4:00p
/quotes/zigman/1466682/quotes/nls/gm US : U.S.: NYSE
Volume: 4.26M
June 8, 2012 4:08p
Rev. per Employee$733,531
/quotes/zigman/9021597/quotes/nls/yelp US : U.S.: NYSE
Volume: 1.13M
June 8, 2012 4:07p
/quotes/zigman/5131883/quotes/nls/lnkd US : U.S.: NYSE
Volume: 3.25M
June 8, 2012 4:07p
Rev. per Employee$291,452
/quotes/zigman/7212269/quotes/nls/grpn US : U.S.: Nasdaq
Volume: 6.37M
June 8, 2012 4:00p
Rev. per Employee$140,391
/quotes/zigman/7212269/quotes/nls/grpn US : U.S.: Nasdaq
Volume: 6.37M
June 8, 2012 4:00p
Rev. per Employee$140,391
/quotes/zigman/411392/quotes/nls/ubs US : U.S.: NYSE
Volume: 3.59M
June 8, 2012 4:08p
Rev. per Employee$716,539
/quotes/zigman/86035/quotes/nls/ndaq US : U.S.: Nasdaq
Volume: 2.76M
June 8, 2012 4:00p
Benjamin Pimentel is a MarketWatch reporter based in San Francisco.
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