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Facebook’s Shares Stumble: Flop or Not?

Facebook’s Shares Stumble: Flop or Not? | ProTelp | Scoop.it

Just two days after Facebook’s IPO and share prices have fallen hard and fast; over 10 percent had been knocked off the company’s record-breaking initial valuation.

Thursday, saw the execution of the much anticipated IPO where Facebook shares were valued at $38 each. With these prices set the eight-year-old company would be worth $104bn the first of its kind for this type of business.

 

“Investors are increasingly aware of the risk embedded in the stock price. There are real concerns about growth and advertisers’ frequent lack of certainty how best to use Facebook, along with rising costs and ongoing acquisition risk,” Pivotal Research Group Brian Wieser told Reuters.

 

One of the biggest events in Facebook’s timeline, last Friday, was delayed onto the Nasdaq stock exchange due to technical problems. The Nasdaq boss (Robert Greifeld) said he was “humbly embarrassed” by the glitch.

 

The shares closed on Friday at $38.23, having hit $45 earlier in the day. Yesterday they closed at just $34.03, down 11 percent from Friday’s closing price.

 

Other internet companies have had a range of experiences when they started selling shares:

 

Shares in business networking site LinkedIn more than doubled from their $45 offer price on their debut in May 2011. They peaked at $117 and are now trading around the $100 level. Discount voucher firm Groupon’s shares jumped 30% on their debut in November. But they are now at about $12, well below their $20 flotation price. Online games maker Zynga’s shares fell 5% on their first day of trading in December 2011. They are currently around $7, below their $10 offer price.

 

Google, however, is the star performer of the technology IPOs. Launched in 2004 at $85 a share, it is now trading above $600. It has yet to regain its pre-financial crisis peak of over $740, hit in 2007.

 

- BBC Business

 

It’s quite clear to see that the recent IPO has failed to impress the investors but critics are undecided on the future of Facebook. Whilst many argue it is too early to give a verdict many believe the drop in shares is due to Facebook not having a firm grip on their advertising offerings.

 

Will share prices continue to slope or is it too early to say? Leave your comments below.

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How Content Curation Services Can Drive Massive Traffic to Your Site

How Content Curation Services Can Drive Massive Traffic to Your Site | ProTelp | Scoop.it
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Screen Capture Software

Screen Capture Software | ProTelp | Scoop.it

Capture anything you see on your PC screen with SnapIt. It is convenient tool for graphic designers, bloggers who capture and crop images for their posts, for tech writers who need to describe menus and interfaces of applications, web designers and those who work with graphics every day. It captures and auto saves images with one click.

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