Facebook stocked opened at $19.93 a share on Wednesday and continued to recede farther from the $20 mark in early trading after a negative report in Bloomberg raised concerns about the strength of the company's advertising model.
According to Bloomberg, Facebook's management team repeatedly tried to withhold or misrepresent information about the effectiveness of its advertising strategy and the company's ability to monetize on mobile in conversations with the Securities and Exchange Commission during the lead-up to the IPO.
In one instance, Facebook executives reportedly double-counted some mobile users. In another instance, the Facebook team made claims about the potential for its ads that were supposedly based on Nielsen data, but the SEC pushed back on the belief that they were really based on marketing materials. Facebook eventually dropped those claims all together.
The stock briefly dipped below $20 a share in trading Tuesday for the first time in nearly two weeks, going as low as $19.97 before closing the day at $20.23.
Facebook shares have been on the decline through this week after BTIG analyst Richard Greenfield lowered his price target on the stock to $16 due to concerns that Facebook's attempts to monetize will end up hurting the user experience. The stock also declined last week as well after Zynga cut its sales outlook, raising questions about how this will impact Facebook's payment revenue.
As of publication, Facebook's stock was down nearly 3% on the day to $19.67 a share.