Month: September 2012

Since Facebook’s eagerly awaited initial public offering (IPO) of $38.00 (U.S.) per share on May 18th, its shares have fallen to $20.28 (U.S.) each. How did this happen to such a dominant social networking service in just four months?

Facebook’s crisis arguably started when General Motors Co. announced it would be removing its paid ads from Facebook because “it didn’t believe advertising on the site was effective.” Two days later, when Facebook’s IPO began, it immediately started dropping. This further hurt Facebook as other marketing firms began to doubt it as a viable place for advertising.

In just three months, Facebook fell from a near-hundred billion dollar “social media darling” to $46-billion (U.S.). In a desperate bid for advertising, Facebook “began experimenting with ads that pop up in user’s Facebook feeds – even if they haven’t agreed to accept messages from that advertiser.”

Recently, Facebook has taken a major blow from the financial journal, Barron, which stated that “the company is overvalued and may drop to $15.00 (U.S.) a share or lower.” Facebook’s shares fell up to 11%.

As of September 25, 2012, Facebook shares are worth $20.28 (U.S.) each.

Is the stock a buy? Right now, I don’t think so.

References:

https://www.google.ca/finance?client=ob&q=NASDAQ:FB

http://www.economist.com/node/21554532

https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20120818/RBSOCIALCOVER0817ATL

http://www.bbc.co.uk/news/technology-19699205

http://business.financialpost.com/2012/09/24/facebook-sinks-after-barrons-says-stock-only-worth-us15/

http://www.toonpool.com/user/5624/files/space_x_launch_1687755.jpg

Apple’s manufacturing partners and subcontractors in China are allegedly using extreme labour conditions for the completion of their products.

According to the New York Times, “Chinese factory workers are forced to work overtime without a single day off in the week.” Working conditions within the factories are unsafe as well: “about 140 workers were injured two years ago at an Apple supplier in eastern China while they used a poisonous chemical to clean iPhone screens. Seven months later, two explosions in iPad factories killed four workers and injured 77.” Of course, these workers are underpaid; they receive a measly $8 (collectively) for each unit produced, a small fraction of the iPad’s $499 sale price. Conditions are so extreme that there have even been numerous cases of attempted suicide (19, according to the article), prompting suicide nets to be installed in the factories. Apple’s Chief Executive, Tim Cook, has recently hired the Fair Labor Association, which is now looking into the case.

The main ethical issue here is the exploitation of Chinese factory workers. Will you still purchase Apple products knowing the conditions under which they are made?

References:
http://digitaljournal.com/article/318569

http://mashable.com/2012/03/07/ipad-made-ethically/

http://www.dailymail.co.uk/news/article-1282481/iPad-factory-suicides-China.html

http://www.ibtimes.com/articles/311137/20120308/apple-ipad-foxconn-slave-labor-contract-sumofus.htm

http://www.ctvnews.ca/sci-tech/apple-iphone-s-chinese-manufacturer-faces-labour-complaints-1.953035

http://www.ilovetech.it/wp-content/uploads/foxconn3.jpg

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