FB IPO

IS IT TOO EARLY TO APPRAISE FB BASED ON ITS INITIAL PERFORMANCE ON THE STOCK MARKET ?

FACE BOOK SHARES TRADED UP INITIALLY WHEN THE COMPANY WENT PUBLIC ON MAY 18.

APPARENTLY, FACEBOOK’S IPO DIDN’T MATCH THE HYPE.

ON MAY 29 FB’S STOCK HAS PLUNGED NEARLY 18% FROM ITS IPO PRICE OF $38.

LOTS OF INSTITUTIONAL INVESTORS HOWEVER STILL BELIEVE THAT IT IS TOO EARLY TO APPRAISE FB BASED ON ITS INITIAL PERFORMANCE ON THE STOCK MARKET.

ALSO, LOTS OF INDIVIDUAL INVESTORS DO BELIEVE THAT FB JUST NEEDS TO PROVE ITS LONG-TERM WORTH.

ADDING TO THE DISAPPOINTMENT, REGULATORS BEGAN INQUIRIES INTO WHETHER FAVOURED INVESTORS WERE ALERTED TO FACEBOOK’S WEAKENING FINANCIAL PROJECTIONS AND DUMPED STOCK WHEN BUYING WAS OPENED TO THE PUBLIC.

SOME INVESTORS ARE SUING FB ABOUT WITHHOLDING INFORMATION ON THE COMPANY’S IPO BUT SO FAR REGULATORS PROBING FB Inc’S LISTING ON THE NASDAQ HAVEN’T FOUND ANY EVIDENCE OF INDUSTRY RULE VIOLATIONS AND VIEW THE BOTCHED OFFERING AS A TECHNICAL FAILURE.

AGAIN, DOES FB JUST NEED TO PROVE ITS LONG-TERM WORTH ?

  • SOURCES : CNN, THE ECONOMIST, WSJ.

PHLDUCX