Back in March, I wrote about the announcement by Facebook of it’s IPO. After a very long drumroll, the big event finally took place on Friday, May 18th. After a delayed opening, for reasons no one can quite explain, shares began to trade in a range of $38 to $42. After all of the hype, the feverish anticipation and the endless commentary, the social media site closed the trading day with a gain of 23 cents. By the close of business on Monday, shares had dropped to $34.05, an 11% difference, and in after hours trading, it had continued to decline, sitting at $33.78 while I’m writing this post. Even good news from Greece didn’t help. As the Nasdaq saw its’ largest single day increase since December 2011, Facebook just continued to sink.
Between my first post about Facebook and now, I’ve followed the company, trying to find out just why there was so much hoopla over this particular public offering. What I found was underwhelming, to say the least. It wasn’t so much the articles I read at Bloomberg or the Wall Street Journal or at CNBC. The most interesting and enlightening stories came from the comments people left at these sites. Many of them have or once had Facebook accounts, and their opinions about the site and the company were not the stuff of which corporate dreams are made.
There is a strong belief that Mark Zuckerberg, one of Facebook’s founders, is not really interested in becoming the type of CEO who will protect and look out for the interests of shareholders. He is cavalier, full of hubris and likes being a billionaire. Answering to the demands of shareholders doesn’t appear to be a priority. Some have called him disrespectful, immature and, even somewhat naive. He has either arrived late, or not at all for investor and analyst events – events which were meant to promote the very business these folks were supposed to be interested in purchasing for themselves or clients. When Zuckerberg could find his way to one of these meetings, he did so dressed in his trademark hoodie, and gave off the cuff speeches which sounded more like the ramblings of a college frat boy than the CEO of a major company. I’ll give him a pass for ringing the opening bell at NASDAQ on Friday from Facebook’s headquarters in Menlo Park because he did get married in California the next day.
The other thing I learned reading the comments was that a large number of them couldn’t understand how Facebook could grow its’ profits enough to satisfy investors. Facebook users have said that they avoid clicking on the advertisements because they don’t want to be hounded by any more ads than they’re already getting. They’ve also stated that if the company plans on charging them to use the site, they will simply close their accounts. In all honesty, I really don’t blame them. I’d do the same thing. It really isn’t worth the price of admission. Selling information about users is all that’s left, something I had covered in my earlier piece.
I’ve probably read more than a couple of hundred of these comments in the past couple of months. They haven’t looked any better or more promising since Friday. If you know something I don’t, or have the secret as to why so many people wanted to board this particular train, I’d be happy to hear your opinions and comments, because I’m frankly at a loss. I only know slightly more about finances than I do about my computer, and I think we all saw how well that’s working for me.