Warning: preg_match(): Unknown modifier '/' in /home/customer/www/industryleadersmagazine.com/public_html/wp-includes/class-wp.php on line 233
Facebook IPO: Let’s Face It. - Industry Leaders Magazine
 

Facebook IPO: Let’s Face It.

Facebook IPO Success

Facebook IPO Success

Facebook Inc, the California based world’s largest social networking site rang the bell on NASDAQ on 18th May, 2012. What started off as a simple algorithm in a dorm in Harvard is now publicly listed at $38 per share to raise $18.4 billion.
So what were investors expecting out of this public offering? Will the shares ride high on the wave of retail investor’s optimism? Facebook is valued at $104 billion at the IPO price but is it really worth it? The valuation is based on the company’s ability to generate future earnings, and recent announcements of General Motors planning to withdraw $10 million advertising buy from Facebook and its dwindling revenue model is not really helping the case.
Of the 900 million registered users on Facebook, about half of them access it from their mobiles. Facebook is still struggling to find a model to earn revenue from the same. Will Facebook manage to keep the data of all of its users private as it promises? As a shareholder, and most possibly a user, a person would want to keep his privacy while earning money from the company. And while he would also access it from his mobile device, the advertisements may not pleasing to the eyes. Double edged sword, Zuckerberg?

Facebook IPO: Success Matrix

Making the model a paid model, may help in generating revenue. But this creates severe doubts as to why would a user want to pay for updating a status on one social networking site, while other social networking site offers similar service for free? And if someone would have to pay to keep their data private, they would rather not share private photographs over social media networks than pay to keep their data private.
While they try to figure out the answer to revenue generation, another question faced is of return. As everyone’s favourite social networking company went public, the excitement amongst the users and investors around the world has risen multifold. Everyone wants the hoodie clad CEO to create wonders at the stock market.
Facebook began trading at $48.05 and despite technical glitches in systems of NASDAQ, which delayed the start of trading for 30 minutes, more than 500 million shares changed hands and it closed at $38.23. On Monday, it plunged by 11 percent to $34.03 and slid another 6 percent on Tuesday, 22nd May, 2012. But that is expected when one of the most anticipated IPOs of the year comes out, especially when questions are raised on its shares are valued at 100 times its price-to-earnings ratio.
Going forward, Facebook has a lot to offer to its users and investors. Apart from acquisition of the photo sharing social networking site, Instagram and other technologies to reach a wider audience, Facebook also provides a platform for other companies to innovate.
With 1/7th of world population currently registered on Facebook, and having users as its product, Facebook will need constant innovation and keep evolving itself to live up to it’s users’ as well as investors’ expectations. The ride may seem bumpy right now, but it would be unfair to write off Facebook already.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Leave a Reply

Your email address will not be published.

Recent Posts

Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Beeple Getting Hacked Resulted in His Followers Losing Over $438,000 in Crypto

Two tweets were posted using NFT artist Beeple’s account. The first one promoted an exclusive collection with Louis Vuitton. The second tweet announced that Beeple would soon rel
17 hours ago
Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft Selling Metaverse to Kawasaki: It’s A Whole New World

Microsoft’s corporate vice president of mixed reality, Jessica Hawk, recently told CNBC that the metaverse will change how people function across a variety of devices and platfor
19 hours ago
Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

Cryptocurrency Market Updates: Bitcoin Could Hit $500,000 Per Coin

On March 15, Novogratz went so far as to predict that the Bitcoin future price will reach half a million dollars per coin by 2027. He made this statement at the Bitcoin 2022 confer
2 days ago
Klarna CEO Uses Pre-Recorded Message For Laying Off Employees

Klarna CEO Uses Pre-Recorded Message For Laying Off Employees

Managers and HR personnel must be coached on how to compassionately convey the message as it is one of the most difficult conversations an individual can have. Open and honest comm
2 days ago
China Might No Longer Be An Apple Manufacturing Country

China Might No Longer Be An Apple Manufacturing Country

The iPad manufacturer has previously sought to remove China as the main Apple manufacturing country. Trade tensions and a strict Covid-19 policy has previously resulted in supply c
3 days ago
D.C. Refuses to Let Zuckerberg Wash His Hands Off Cambridge Analytica

D.C. Refuses to Let Zuckerberg Wash His Hands Off Cambridge Analytica

In the same year, Racine had sued Meta, then known as Facebook, for failing to protect user privacy and deceiving them about how much data is collected and how it was used. The Att
3 days ago