When one looks at where Facebook's (News - Alert) stock is trading at today, $20.19 per share, it's almost unfathomable how far the stock has fallen below its IPO. AT this point the stock is nearly half its value at the point of entry in the market on May 17th.

There is obviously one simple explanation behind the bad fortunes, Facebook is deemed over-valued. Even at these depressed levels the company's market capitalization stands at a whopping $45 billion and that is just too rich for the market's taste. True that the company has a massive user base, but obviously the company is facing hurdles converting its huge traffic to earnings.

The fear is that if the company doesn't act fast enough in developing and executing viable plans to capitalize on its user base, it may eventually become irrelevant as MySpace (News - Alert) did. In that case, Facebook is still grossly over-valued even at its current battered levels.