Mark Zuckerberg laid the foundation of Facebook from his Harvard dormitory room on February 4, 2004 and Social networking world changed thereafter. It took the entire world by storm and now more than 900+ million people are members of this social networking giant. Facebook enjoyed cult status and made many patrons in a short period of time and it was touted as biggest online revolution after the advent of internet itself. The CEO of Facebook, Mark Zuckerberg became youngest billionaire and the company touched eye-popping valuation of $100 billion. Everyone wanted a pie of Facebook and that’s when people anticipated for Intial Public Offering though the company always delayed the launch but decided to go for it on May 18, 2012. The Wall Street all geared up for the D-day, there was enthusiasm in the air among Investors whether institutional or retail. Everything was going fine until some insider from the company leaked some crucial news about the quarter earning projection of the company. The source revealed the revenue for coming quarter will not meet analyst exception and that was it.
- World without Facebook – A stark reality?
Once the news was leaked to the potential large investors they became cautious and bought the shares at low valuation or off-loaded their shares. But however retail investors were not informed about the same and they later came to know through media. After that incidence the Facebook stocks have seen a gradual decline at stock exchange making it one of the bad performing stocks. The faith of investors have been jolted and dented and large group of investors even have files a class suit against Facebook and its CEO. Some of the industry insider even predicting that Facebook will disappear within 5 to 8 years. The reason analyst are worried about Facebook earning is because almost 50% of the Facebook users are active on mobile phones and they have not come up with something concrete to monetize on this. This is a great concern for Facebook, because research proves that by 2020 lot more people will be using tablets and smart phone than PC or Laptops. And investors also showed certain amount of discomfort during Facebook’s acquisition of Instagram for $1 billion.
Though Facebook IPO made many millionaires and billionaires but the sliding stock has made Wall Street all the more cautious with Internet Companies. To add to this the lackluster performance of Groupon’s and other internet companies stocks add to continuous worries of investors. Though a ray of hope can see with Linkedin and Zynga whose stocks has performed better than the expectation but just a few won’t cheer up the souls of badly battered and bruised investors.
