(Image Source: VentureBeat)

 

BY AUSTIN ALONZO

ANCHOR LAUREN ZIMA 



After a chaotic IPO, Facebook’s much-hyped stock fell flat of expectations, earning only 28 cents at the close of trading on Friday.
 

The stock rose in value by 10 percent to $42 per share within minutes of opening as investors overwhelmed the NASDAQ with trades, but by end of the day Facebook’s underwriters had to step in to keep the stock above the IPO price of 38 dollars.
 

The Wall Street Journal explains...
 

“Morgan Stanley … had to dip into an emergency reserve of around 63 million Facebook shares — worth more than $2.3 billion at the offer price — to boost the price ... In successful IPOs, the reserve … is used by underwriters to meet soaring demand but in this case, it was used to prop up Facebook's ailing share price.”
 

Both retail and institutional investors rushed in to buy the stock, but experts weren’t impressed. CBS News spoke with an economist who said the stock fell on its face …
 

“The average first day is about a 15 percent gain over-all … so we have basically a nothing percent gain. So they unveiled the next great starlet of the tech world and she fell on the red carpet.”
 

Despite a mixed reception, Facebook aims to raise around $18 billion on its IPO shares. But the BBC reiterates -- there are doubts the $104 billion company can turn its users into revenue.

“It’s very early days in developing this business model. The company is still rolling out new ways for advertisers to reach those 900 million users.” 

Facebook has faced tough questions about whether its advertising is effective. The Christian Science Monitor reports revenues are shrinking, especially on mobile devices.

“GM decided to pull a $10 million ad buy. And with revenue growth slowing, Facebook has also struggled in the mobile space, which will become, according to Zuckerberg, its prime goal this year.”

Investors and interested parties can look forward to this summer when Facebook releases their post IPO financials in their first quarterly earnings report.

Facebook Shares Fall Flat on IPO

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May 20, 2012

Facebook Shares Fall Flat on IPO

(Image Source: VentureBeat)

 

BY AUSTIN ALONZO

ANCHOR LAUREN ZIMA 



After a chaotic IPO, Facebook’s much-hyped stock fell flat of expectations, earning only 28 cents at the close of trading on Friday.
 

The stock rose in value by 10 percent to $42 per share within minutes of opening as investors overwhelmed the NASDAQ with trades, but by end of the day Facebook’s underwriters had to step in to keep the stock above the IPO price of 38 dollars.
 

The Wall Street Journal explains...
 

“Morgan Stanley … had to dip into an emergency reserve of around 63 million Facebook shares — worth more than $2.3 billion at the offer price — to boost the price ... In successful IPOs, the reserve … is used by underwriters to meet soaring demand but in this case, it was used to prop up Facebook's ailing share price.”
 

Both retail and institutional investors rushed in to buy the stock, but experts weren’t impressed. CBS News spoke with an economist who said the stock fell on its face …
 

“The average first day is about a 15 percent gain over-all … so we have basically a nothing percent gain. So they unveiled the next great starlet of the tech world and she fell on the red carpet.”
 

Despite a mixed reception, Facebook aims to raise around $18 billion on its IPO shares. But the BBC reiterates -- there are doubts the $104 billion company can turn its users into revenue.

“It’s very early days in developing this business model. The company is still rolling out new ways for advertisers to reach those 900 million users.” 

Facebook has faced tough questions about whether its advertising is effective. The Christian Science Monitor reports revenues are shrinking, especially on mobile devices.

“GM decided to pull a $10 million ad buy. And with revenue growth slowing, Facebook has also struggled in the mobile space, which will become, according to Zuckerberg, its prime goal this year.”

Investors and interested parties can look forward to this summer when Facebook releases their post IPO financials in their first quarterly earnings report.

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