Facebook looses $50 billion in value since IPO
New Delhi: Facebook's disastrous IPO is well documented, and needless to say the company fell flat on many a expectation from its performance in the financial markets. Now, that it has been a whole 4 months since the incident, it has been revelaed that the social networking site has lost more than $50 billion in value from its original starting point of $104 billion. This puts it ahead of Lehmann Brothers, who had collpased during the financial meltdown of 2008.
David Ebersman has been the central figure in all of the debacle. Being the Chief of Finance for Facebook, he was responsible for setting the price of shares to be issued in the open market, but it seems his advisors didnt do him good. Morgan Stanley, JP Morgan Chase, and Goldman Sachs were the main advisors, but it semms the $38 a piece pricing, ultimately did the company in. A majority of shares are held by the company employees, but now with the plummeting price ($17.73), a lot many are looking to sell their stock, which in turn harms the price further further. Noted names like Peter Thiel also dumped a million of his Facebook stock, after the IPO went kaput.
The other problems this is posing, is that Facebook is unable to bring in new talent, which otherwise has been the reason for its rise to corporate glory. With the stock prices going down further, and the financial situation still in the doldrums, new talent find it hard to see Facebook as a safe and secure place to work.
However all isnt doomsday for the social networking giant. Mark Zuckerberg's baby as it rightly can be called, will be looking to reinvent itself at the end of the year, when many new innovations are supposedly in the pipeline. Since many mobile users are using the site, advertising revenue from that medium is stated to go up in the times to come, which would get back the share prices to a more desireable level for shareholders.