

Facebook stock drops below an arbitrary number in a popular number base - jgrahamc

Seriously, HN, please stop submitting micro-updates to the Facebook stock price. The fact that it dropped below $20 (briefly) is terribly tedious. All it means is that (a) Facebook's stock has dropped a bit more and (b) Facebook's stock is below a small multiple of a power of ten.<p>If Facebook stop suddenly drops by 90% then it might be worth discussing, or if Facebook suddenly submits an SEC filing that reveals that the end is nigh. Until then let's not get obsessed with its stock price.<p>There are only 30 spaces on the front page, let's reserve them for something meaningful, not what looks almost like technical analysis and the nonsense about 'support levels'.
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pdabbadabba
I'm as bored by micro-updates about FB's share price as the next person, but
consider two propositions:

1\. Drastic drops aren't the only interesting ones. If FB were to decline
slowly all the way to (say) zero, presumably the decline would have become
interesting and newsworthy sometime before that point regardless of the slope
of the decline. Where exactly is this point? Who knows. But given the human
mind's heightened interest in multiples of 10, $20 seems like as good a
candidate as any other. (Along with probably $10 and $5.)

2\. Whether you believe in them or not, stock prices are said to have
psychological support levels. Above price X, the investing public is inclined
to view a stock favorably. But if it drops below that, a new narrative may
begin to emerge that itself can have an effect on the price. You call this
"nonsense" but provide no evidence in opposition to the conventional wisdom.
It may be that "objectively" there is nothing special about the number 20, but
markets are made by interactions between people and in modeling the behavior
of people, psychological facts are relevant. One psychological fact is that
people take an interest in multiples of 10, and movement across them can
therefore have significant consequences.

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kiskis
it moved again :)

