Facebook IPO Fails to Live Up to Hype
The highly anticipated mega IPO launch of social network leader Facebook was a disappointment as it rose just 23 cents, a gain of 0.6% over its IPO price of $38, amid record volumes.
Still, the $104 billion IPO – second-biggest in history behind Visa and General Motors, made instant billionaires out of CEO Mark Zuckerberg and other Facebook employees have became millionaires.
Well, we can only reminisce those days of dot com mania when valuations can double on opening days regardless of the business. If the price falls below $38 soon, it could put a real dampener on other tech stocks.
Facebook’s profit of $668 million last year from revenue of $1.06 billion makes the current valuation steep. But I won’t underestimate the influence of Facebook which has brought people closer, speed up sharing of information and helped shaped opinions. If Facebook continues to grow, monetize its large user base and make shrewd acquisitions on new technology, it could be a valuable stock to own.
Founder and majority owner, Mark Zuckerberg intends to stay for the long term, with much of his paper wealth tied to the fortune of his company. Will you be throwing your lot in with Facebook too?
Paul is a geek who shares his thoughts on technology, gadgets, social networks and football in this blog. Stay in touch with his updates by subscribing to the RSS feeds or Email. Thanks for visiting Seventoten and leaving a comment. To change this standard text, you have to enter some information about your self in the Dashboard -> Users -> Your Profile box.