Debacle, fiasco and mess are some of the adjectives that today, if one week of the Facebook IPO have been applied to this debut on Wall Street, which has faced technical problems with the Nasdaq Stock Market, doubts about your business and even a lawsuit.
“The opening stock has been a fiasco,” thus cutting today was Professor of Economics at New York University (NYU) Anindya Ghose on which it became the third largest initial public offering of shares ( IPO) of a U.S. company in history.
The firm led by Mark Zuckerberg debuted last May 18 on Wall Street at a price of $ 38 per share.
But today, exactly one week after the most anticipated IPO in years, the situation is very different: Its stock closed Friday’s session with a fall of 3.39% to $ 31.91, which accumulate 16% slump in his short career in the stock market.
“He has not been anywhere near what we thought would be good. There are a number of reasons for this and one is that, first, set an excessive price, far below the correct price in my opinion would have been just under $ 30 and it was actually the original range was announced (between 28 and 35), “says Ghose.
Maybe that’s the huge buzz created around its release and found strong demand for its IPO, Facebook decided to increase this range to between 34 and $ 38 and increase from 388 to 421,200,000 the number of shares brought to market , which is attributed to the sharp drop in their titles in stock.
The fault has also fallen on the Nasdaq market, whose executives have come to recognize to be ashamed about their difficulties in processing the flood of orders for the sale of shares of Facebook on his first day of contributions, which led to thousands of investors do not know if their requests had been executed or not.
“There is a high probability that Facebook will change the Nasdaq and the NYSE, as has happened in the past,” says NYU professor, echoing the information to suggest that these technical problems will cost market in the Nasdaq-listed giants like Apple and Google – running out of the social network.
Other fingers point Zuckerberg himself, who with other members of the board of directors of the company and the banks that guaranteed the placement of their stock is subject to a lawsuit filed by a group of investors.
The lawsuit, one of the hardest blows with which Facebook found this week, said they all knew that the social network “was experiencing a severe and sharp decline in revenue growth” but it only reported some of its investors ‘preferred’.
“There is much dirty work in this agreement,” said NYU economist, for whom this IPO was “specifically structured to benefit very few people: the underwriters led by Morgan Stanley, Zuckerberg’s friends and the community of investors who had pumped money into Facebook from the beginning. ”
The lawsuit against the world’s largest social network related to a drop in company revenue precisely because of what has been called its Achilles heel: the migration of users from traditional computers to mobile devices, where space for Advertising is much more limited.
55% of the over 900 million Facebook users access the platform through a mobile phone, and Ghose agrees with other economists that this is both its greatest weakness as their greatest opportunity to capitalize on the page that connects to a eighth of the population.
“I think Facebook is an incredible company has very good products and a huge potential (…), but what they should do is monetise the page as soon as possible,” says the economist, who is optimistic about the company because in his view social networks represent a shift comparable to the Industrial Revolution.
Category: Business News