"Can anyone explain what happens when this really tanks like drops below 10 dollars a share? Any chance of them going out of business in two/three years? Or will it just drop to a certain point then limp along until they realise how they can make money from it?"
If Facebook don't have debts to pay off, which I don't think they do, then they can continue on even if the share price is low, so long as they are turning a profit. You ask a very good question. Low share price does not mean that Facebook will go out of business. But what it does is limit their options. Selling stock is a big way of raising capital. If the stock is not well valued, then they cannot make much money through that. Similarly, if the stock is not well valued, their options for borrowing are more limited. When we talk about their stock not being valued, we're really talking about their actual market capitalization. Ultimately, if the stock falls really low, it means that people don't think Facebook is a big business - no matter how many people use it or how high the brand recognition. And if they're a small business, then they are subject to takeovers and other market issues that big players shrug off through sheer size. Also, investors are going to be less tolerant of the board giving themselves nice big salaries and bonuses. Basically, it means that Facebook turns out to be just another run of the mill company along with numerous other corporations that are "just" worth a billion or whatever. Google, Microsoft, Apple, Baidu.. .they'll all just regard Facebook as another morsel. Given how much investors have paid for stock, who then see it devalue to <$10 (in your scenario), they would put a lot of pressure on the board to try and recoup their investment. A *lot* of pressure. If they think they could get a good price for FB, they might encourage takeovers.
So basically in answer to your question, if FB shares drop <$10, no that doesn't mean FB goes out of business. But it does mean that the market doesn't consider them a big player with all the limited credit, vulnerability, etc. that goes with that. Market Capitalization is your ability to go "Rarr" and have others jump.