Facebook has been a steadily growing company since its debut in 2004, and as each year hundreds of millions of members join the network, the company’s growth has continued to explode.
With this explosive expansion occurring on the social network, over time it became clear going public was going to be inevitable. After a couple of years of “will they or won’t they?” IPO related queries, it became certain last year it was no longer “will they?”, but evolved into “when will they?”
On May 18, 2012 the day finally came after much hype and anticipation. Facebook was predicted to be the “mother” of all IPO, especially in the tech sector. Business, financial and tech publications were dominated by every detail surrounding the Facebook IPO.
After all that hype, its turned out to be a major letdown. In several media reports, the IPO became referred to as “Facebook Flop.”
The stock opened at $38 and on the first day. Rumor across several media reports indicated the banks that underwrote Facebook’s IPO ended up buying stocks before close on that the first day of trading to ensure the stock closed above its initial offering price. And it did manage to close higher than its debut price, but only by 23 cents.
Day two proved to be even more dismal. The stock’s value continued to plunge in the early hours of trading and fingers began to point all around. Some of the blame was aimed at NASDAQ because of some technical glitches that had occurred.
However, it’s now two weeks later and the stock continues to take a dive. Yesterday the stock closed at $28.64, down 3.24 percent from yesterday. According to NASDAQ as of June 1, the high has been $45 and the low, $26.83, so it’s sitting only two dollars higher than its all-time low as of date of this article’s publish.
According to Forbes, even James Gorman, CEO of Morgan Stanley that took charge of the IPO, is disappointed. He’s on the defense, as the blame game continues, he’s been vocal that his bank worked “100 percent within the rules” and “speculation of nefarious activity” in regards to the Facebook IPO are untrue,” reported Forbes.
Can the stock recover? Only time will illuminate whether or not the social network giant’s stock worth will eventually rise to meet even a fracture of the hype it had been given over the past several months. Right now things aren’t looking so good, and its lackluster performance has been widely seen across the web as a major fail.