Facebook Faceplant?
On May 18th 2012, Facebook was released to public trading on the stock market with an initial public offering at the price of $38. There was much hype around this IPO; many analysts were anticipating the stock to skyrocket. The opposite happened.
An article on Yahoo written on Sept 27th reports that Facebook’s stock has been down on 51 trading days, up on 39 and unchanged on two since its initial public offering.
What happened? How come facebook is faceplanting?
There have been debates… and many factors could come into play.
1. initial IPO hype was too high – analysts overvalued facebook’s stock
2. weak investor confidence in stock – may think facebook is a fad – doubtful of future success
3. mobile application does not provide efficient advertising
4. advertising on facebook is less effective than what companies are hoping for
These are just a few of the many factors that could have contributed to the plummet of the stock price. Facebook Inc. closed the market on Oct 1st with a stock value of $21.99 per share, 43% below its IPO price.
What lies in the future for Facebook? We shall see. For now, things aren’t looking too well for Mark Zuckerberg and his company.
“Prices of Facebook stock since long-awaited IPO – Yahoo! Finance.” Yahoo! Finance – Business Finance, Stock Market, Quotes, News. N.p., n.d. Web. 2 Oct. 2012. <http://finance.yahoo.com/news/prices-facebook-stock-since-long-awaited-ipo-212925363–finance.html>.