Raising a toast to Facebook's sinking stock price

The Bull and Bear Steak House. Photo / Supplied
The Bull and Bear Steak House. Photo / Supplied

Facebook's share price has dropped about 27 per cent from its original IPO price of US$38 ($50). While this is painful news for Facebook investors, it is good news for the patrons of the Bull & Bear Steakhouse in New York's Waldorf-Astoria Hotel.

The bar, which is decked out with its own stock ticker, is offering a special discount on cocktails all through the northern summer, tied to Facebook stock's daily performance.

The discount requires a minimum 1 per cent drop in share price and is capped at 5 per cent. For example, a 1.25 per cent drop in stock that day means a US$1.25 discount on cocktails that evening. The promotion applies to cocktails only, which cost an average US$14 to US$18.

Ironically, customers will need to "Like" the Bull & Bear Facebook page to get the discount.

Matt Zolbe, director of sales and marketing at the hotel, says the promotion is a way to reach younger customers through social media. He says the idea came when one of the hotel's banquet captains and a server were talking about Facebook and he learned that the captain had made arrangements to purchase stock, which Zolbe expected would drop.

He wanted to take advantage of Facebook being a popular water-cooler topic, especially among the bar's finance-world clientele.

Last Friday lunchtime the share price was down about 5 per cent since the market opened. "We don't know what it will be when it closes, but it's looking to be a good day," Zolbe remarked.

It got better for customers, closing down 6.4 per cent to close at US$27.72 last week.

And if the banquet captain wanted to drown his sorrows in discounted drinks? "He's not encouraged to be one of our regular bar patrons," says Zolbe.

Hedge funds and speculators are licking their lips and queuing up to bet against struggling Facebook in the wake of the social networking giant's calamitous stock-market launch, new figures show.

Facebook's slide has hammered investors and wiped billions off the value of founder Mark Zuckerberg's personal 28 per cent stake in the behemoth.

Research firm Data Explorers says around 33 million shares - 8 per cent of the stock sold in the group's US$104 billion initial public offering - are on loan to short-sellers banking on further falls in the share price.

Shorters borrow shares to sell them in the market, hoping to buy them back more cheaply later and bank the difference as profit.

- BLOOMBERG, INDEPENDENT

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