Facebook’s recent IPO and declining stock prices has caused much spark in the financial sector. Is this indicate of Facebook’s growth rate in the future?
Firstly, what’s IPO?
Initial Public Offering (IPO): The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
With over 800 MILLION active users, Facebook is one of the BIGGEST companies in the world right now and people would have expected its IPO to be SKY HIGH. This generated excessive hype over it, causing an over-estimated stock price. Another main reason could be the lack of advertisements on the mobile site. Due to the rampant use of smartphones, this could affect the company’s revenue quite significantly.
How’s the future like for Facebook?
Actually, I do not think the low IPO is indicative of anything. I mean, sure, if you compare it with Google’s, this is peanuts. However, bear in mind that Google was a relatively young company then when it filed for its IPO, compared to Facebook, which is at a more mature stage of the growth cycle. Hence, its growth is not as exponential as before.
Finally, with Facebook claiming nearly three-quarters of everything using the Internet, it’s hard for it’s growth rate to NOT take a dip. It’s not possible (mathematically) to keep up with the growth rates if there’s no one else left to join in the fun.
So don’t worry, Facebook isn’t going anywhere. It sure isn’t going to follow the footsteps of Friendster or Myspace anytime soon… 🙂
(Reference from External Article: http://search.proquest.com/docview/1013524060?accountid=14656)
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