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'Things aren't looking good for Facebook' - analyst

Published: 8:34AM Friday June 01, 2012 Source: ONE News

Facebook shares could plunge deeper with investors seeking safe places to park their cash, according to an analyst.

Yesterday shares of the social network dropped 65 cents, or 2.3%, to close at $US28.19.

It is the third consecutive trading day the stock has dropped from the previous close, and is now hitting 26% below its initial share price of $US38.

Gretchen Walker from Craigs Investment Partners told TV ONE's Breakfast that things are not looking good for the website.

"We saw an analyst in the US saying it could fall another 20% before it's in line with its other internet rivals, so things aren't looking good for Facebook," she said.

"And of course it opened up the options trading this week, so there's plenty of pressure there on the stock, and it's not an environment where investors are prepared to take another risk - risk is certainly off the table".

Walker told Breakfast investors are not looking for risk, so Facebook shares are not the kind of stock they are interested in in the current environment.