NEW YORK (TheStreet) -- Facebook (FB) is trading 1.9% lower to $49.18 ahead of rival social network Twitter's (TWTR) IPO on Thursday. By mid-afternoon, 54.7 million shares had changed hands compared to the three-month average daily volume of 88.42 million.
Twitter is expected to set the final price for its public debut later in the day. The micro-blogging service upgraded its price range earlier in the week to $23 to $25 a share from initial pricing between $17 and $20. There is chatter the stock could price as high as $27 per share. If the company prices at the high end of the $23 to $25 range, the company will be worth $13.6 billion.
Yet to turn a profit, the high valuation is sparking concerns it could replicate Facebook's IPO failure last year when the latter lost more than half its initial valuation within three months of its float. In the quarter ended Sep., Twitter reported a loss of $64.6 million compared to $21.6 million in the year-ago quarter.
Professional social networking site LinkedIn Corp (LNKD) has also dropped lower, losing 1.6% to $220.86.
TheStreet Ratings team rates Facebook Inc as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate Facebook Inc (FB) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."