After an 11% initial drop, the Facebook stock has plummeted another 7%, even as news of Mark Zuckerberg’s marriage made headline news. What is going on with Nasdaq and at Facebook headquarters?
Putting the possible PR stunt of the Zuckerberg marriage aside, this is pretty shocking news for the once golden IPO. Maybe, it is simply a sign the equity markets are not strong, posting some of its worst moments this past week.
Perhaps the sharp decline in Facebook shares is due to the company’s underwriters lowering their estimates during the IPO roadshow.
The thing I can’t wrap my head around there a lot of things to like about Facebook, the company. Did it simply price the IPO too sky, leaving little room for the early bump most new offerings experience?
Trading glitches at Nasdaq, an European economy in turmoil and many investors sitting on their money hasn’t helped the situation for Facebook.
Maybe the people those who created the IPO got swept in the same hysteria that the media did. Maybe Facebook and its underwriters were greedy. Or maybe people don’t trust a social network going public to reap long-term dividends. Or maybe there is no demand for the supply.
It seems there are more questions than answers at this point, along with a lot of frustration. A week ago, $38 to own a share of Facebook didn’t seem unreasonable, didn’t it?
Right now, what was once hailed as a definite and forthcoming watershed moment for social media and the IPO market is causing investors a lot of heartache, and generating more questions than answers.
This might be one story to watch all summer long.