Facestock; Our Thoughts on Face-Flotation One Month On

  • Social Media

Social media history was made last month when Facebook floated on the Nasdaq. It has been a busy month for the social media giant, with a rather positive IPO on May 18 of $38 per share; at the time valuing the company at $104Bn and making it the largest valuation to date for a newly public company.

Once we’d got over the shock of how much the company was worth, tongues started wagging about the stock market debut. Not much remains to be said about the value of Facebook stock since its debut, but the line on the chart to the left should be clear to anyone, regardless of whether you have an MBA. When the line goes down, it’s a bad thing, people. A very bad thing.

But it’s not all doom and gloom in the Zuckerberg camp. In spite of the law suits, marriages, falling share prices, the latest news is that the share price seems to be rising slightly. Whilst some may scoff and we all know that even a dead cat bounces, this could be the kind of turnaround that many were predicting after what was a rather botched IPO.

In total, Facebook shares have climbed more than 20 per cent in the past two weeks, which goes some way to silencing the nay-sayers and those who felt that the IPO significantly overvalued the social media giant. It’s too early to tell yet whether the rise in price will be sustained, but it is clear that Zuckerberg and Co. seem to have ridden out the worst of the storm.

So, what about the future?  What will happen to Facestock over the coming months? Well, we’ve no crystal ball at Umpf Towers and we don’t profess to be City Analysts, but here are our thoughts on what could happen to the highly priced company in the coming months:

1. The price will stabilise at around $32 per share (a drop of $13 from its stock market opening peak of $45 per share).

2. Facebook will continue to buy up other platforms in order to challenge the supremacy of Google, such as Face.com, the Israeli facial recognition company, which was acquired for a rumoured $60M. These acquisitions could add to the stock value, but it’s probably more about strengthening its position against Google than increasing company value for Facebook at the moment.

3. Zuckerberg will continue to be richer than the rest of us could ever imagine. Sorry about that, folks.

We’d be interested in your thoughts too, so send us a message below or email us your predictions on Facestock at social@umpf.co.uk