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Facebook IPO Falls Flat

by Team Caffeine · 3 comments

lori r taylor, revmediamarketing, social media, social media marketing, branding, product branding, networking, oneclicksociety, social caffeine, mobile marketingWhat’s With All The Hype?

To say the recent Facebook initial public offering of stock failed to impress is like saying the Titanic was a boat that sank.

The stock opened at around $38 and pretty much stayed there all day Friday. Today (as of this posting) the stock had fallen off its opening by about 11% to around $34 a share even though the wider market has risen more than 1%.

So, does this mean that Facebook is a major “fail” and the company is headed for doom? Not at all. In fact, already some are predicting the fact that the Facebook price has not dropped even further (some analysts predicted it would lose half its value after opening) is a sign of its strength. Also, the price of a company’s stock is hardly a sign of its ability to be successful.

Instead, a stock price has more to do with public perception. And public perception about social media in general is still decidedly a mixed bag. Some folks, in fact perhaps as many as half of all adults in the United States, still think it’s just a “fad” that is likely to go away sooner rather than later. So despite the hundreds of millions of dollars Facebook has accrued, and the 900 million people who use it every day, there are a good number of people who still just don’t get it.

Also, Facebook just bought Instagram for $1 billion. Instagram is a popular photo sharing iPhone (and now Android) app which has a handful of employees and no revenue. Facebook‘s exorbitant purchase price has some insiders questioning whether or not Facebook‘s leaders (Mark Zuckerberg in particular) truly know what they are doing and are the best candidates for leveraging the true power of the world’s largest social media network.

The fact is, you cannot judge a company its stock price. If that were true Apple would have been abandoned when its stock price was in the toilet not so long ago. Today that $15 “dog stock” is now worth $600 a share. That’s quite a turn around and more than enough proof for some to believe that Facebook is only just getting started.

How about you. What do you think of the Facebook IPO fiasco?

Though Facebook was one of the most highly anticipated initial public offerings in recent memory, the stock closed with a gain of just 23 cents on Friday after trading was delayed.

Shares barely breached $42 at their peak on Friday — which came at the start of trading — and spent most of the day floating between $40 and $42 each.

More than 80 million shares changed hands in the first 30 seconds of trading on Friday. Volume spiked to about 567 million shares by the end of the session, setting a new volume record for IPOs.

“When some people didn’t see a pop on day one, they got out,” said Nathan Drona, a senior vice president of equity research at ABR Investment Strategy.

Click here to read more about the Facebook IPO.

Team Caffeine

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{ 3 comments… read them below or add one }

Adrian Slew May 22, 2012 at 12:18 pm

I just don’t believe that 900 million number..I think there are many BS and multiple accounts on FB just like on twitter..

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LoriRTaylor May 25, 2012 at 8:23 am

I can’t help but think the same thing myself

But at the end of the day the only thing that matters is how much money they make.
I’d love to raise money on my “potential” and many companies try – but smart investors use their own knowledge and gut instinct.
I like the way you think

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Adrian Slew June 10, 2012 at 11:27 am

It’s just common sense. is there potential to make money through advertising..yes, of course there is, but nowhere near the numbers they claim. Not in the present model of Facebook. GM realized this after trying it out first hand.

A well-crafted, viral marketing stunt that catches on might do well, but acquiring ‘likes’ for a marketing page? Or ads in the periphery? Updates from pages that are ‘liked’ for one reason or another are usually hidden by users and the ads go mostly ignored.

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