Facebook Tanks Even As the Dow Surges Higher
Investors returned from the long weekend in a brighter mood today. Shaking off much of the uncertainty that dogged investors over the past several weeks, broad U.S. markets ended the day abruptly higher after posting a weak start this morning. The Dow Jones Industrial Average (INDEX: ^DJI) gained just under 126 points today, ticking slightly higher than 1%. Similarly, both the Nasdaq and S&P 500 gained 1.1% and 1.2% on the day. Investor concerns over the European debt crisis ebbed slightly today as well, sending the market's "fear gauge" of the VIX (INDEX: ^VIX) down to the tune of 3.6% as well.
The market dislikes Facebook
In what's morphed from the "biggest investing storyline of the year" to the most overly scrutinized investing narrative of 2012, Facebook (NAS: FB) continued its sharp march downward today, settling a wince-inducing 9.6% lower. If the social-networking giant endues another beating like today's, it'll represent almost a 50% drop from its $45 high on its first day as a public company.
Perhaps unsurprisingly, prices of companies closely aligned with Facebook also took a drubbing as well today. Its closest proxy, shares of social-game maker Zynga (NAS: ZNGA) received a nearly 8% haircut as well. The company has also come under heat lately, as investors finally have started to question the viability of its long-term strategy. (Who knew OMGPOP wasn't worth $180 million?)
A model for failure
In after-hours news, shares of Research In Motion (NAS: RIMM) briefly ceased trading today, as the company provided additional details about hiring bankers to explore the always dubious "strategic options" and warned of possible losses in its current quarter. The company, which has become the poster child for botched innovation, saw its shares fall 8% once trading resumed.
Despite operating in one of the largest growth eras in technology, Research In Motion has watch its glory consistently fade as better, more consumer-friendly devices like Apple's iPhone propel the mobile revolution forward. However, despite being one of the best bets in tech right now, it isn't close to the only way to play the rise of smartphones. In fact, the Fool identified another outstanding opportunity for investors, which we detail in our free research report. To learn more about another way to play the smartphone boom, just click here to grab your copy today.
At the time this article was published Andrew Tonnerheld no position in any of the companies mentioned in this article at the time of publication. You can follow Andrew and all his writing onTwitterat@AndrewTonner. The Motley Fool owns shares of Facebook and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.