FACEBOOK STOCKS TUMBLING, FACEBOOK TO FADEBOOK ??
Facebook stocks continue to tumble amidst the various lawsuits and accusations such as greed, cheating, hype and deception. The buzz from the wall street is that people are calling Facebook as “Fadebook”. The panic button already seemed to have triggered, and shareholders are calling in lawyers as stock price tumbles and regulators are also not far behind.
Some really bad news for Mark Zuckerberg and co. is that all the hype for several months about the float of the social networking site, which has nearly almost a billion users across the earth, the number for its shares has gone down drastically since its launch at $38 per share on Friday. The shares are now floating around at $31.76, leaving the company that boasts a user base including half the American population is worth £4bn less than it was a week ago, and earning it a new name: “Fadebook”.
What has come under the scanner is the actions of Facebook’s underwriters in the days just before the IPO launch. On 15 May, 2012, the range at which they estimated the float would be priced was raised from $28–$35 to $34–$38. A day later, the insiders and early investors who had invested in Facebook during private funding rounds increased the number of shares they planned to sell during the IPO massively by 25%, which also means that the Facebook’s bankers and its wealthy early investors have profited exuberantly from the Facebook float.
Looks like Mark Zuckerberg is going to have a nightmarish honeymoon, considering all the black air around the Facebook IPO. Few people have already termed the Facebook IPO as a tech bubble and pretty much sure that the share will go down big time. Critics are already quoting that Facebook lawsuits and negative marketing are destroying Mark Zuckerberg’s image and making him zero from hero.
Lets hope things calm down a bit and analysts be able to clear the air around the Facebook IPO soon.