The 7 Ugly Truths About Facebook | The Exchange - Yahoo! Finance ; DROP of almost 50 %
4. Its stock price won't stop falling
Facebook's IPO was priced at $38 a share on May 17 and has pretty much sunk like a stone ever since, recently slipping under $20 a share for the first time, a 45 percent drop. What happened? Everyone has a theory — maybe the IPO was mishandled, maybe there was too much hype, maybe Facebook was just overvalued from the start — but the fact remains that the social network has lost about $43 billion in market cap in the past two months (half of its original valuation) and is already one of the worst performing social media IPOs to date.
Unfortunately for Facebook, the worst may be yet to come. Starting next month, nearly 1.7 billion more shares could start hitting the market as employees become freed up to start selling their holdings, which could more than quadruple the number of Facebook shares now trading.
5. Executives are leaving
As happens just about any time a startup goes public -- early employees stick around through the IPO, cash out and then move on to new things. At Facebook, however, several high-profile recent defections have raised questions about the company's leadership and its prospects going forward.
4. Its stock price won't stop falling
ReplyDeleteFacebook's IPO was priced at $38 a share on May 17 and has pretty much sunk like a stone ever since, recently slipping under $20 a share for the first time, a 45 percent drop. What happened? Everyone has a theory — maybe the IPO was mishandled, maybe there was too much hype, maybe Facebook was just overvalued from the start — but the fact remains that the social network has lost about $43 billion in market cap in the past two months (half of its original valuation) and is already one of the worst performing social media IPOs to date.
Unfortunately for Facebook, the worst may be yet to come. Starting next month, nearly 1.7 billion more shares could start hitting the market as employees become freed up to start selling their holdings, which could more than quadruple the number of Facebook shares now trading.
5. Executives are leaving
As happens just about any time a startup goes public -- early employees stick around through the IPO, cash out and then move on to new things. At Facebook, however, several high-profile recent defections have raised questions about the company's leadership and its prospects going forward.