Market cap $39.2 billion
Facebook’s overhyped IPO is now more than two months behind us, but the company is still making headlines for all the wrong reasons.
Although the tech press and quite a few analysts voiced their concerns over Facebook’s IPO valuation several months ago, much of Wall Street bought into the hype and we all know what happened next.
Two months on, Facebook’s stock is still underperforming and on Wednesday it hit a new all-time low, $20.88. The company’s market cap is now $39.2 billion, a far cry from the hype induced $100 billion pipe dream.
Worse, there seems to be no end in sight. Zynga recently released some rather worrying results, several major FB investors pulled out, executives are jumping ship and Wall Street is looking for a scapegoat, hence calls for Zuckerberg’s resignation are growing louder.
What’s more, Facebook employees will be allowed to start selling their shares in August and the bulk of the shares will be unlocked in November. If the downward spiral continues, quite a few could choose to unload their shares at current prices, which are roughly half of the original IPO price of $38.
It is a rather interesting twist. Most tech writers are not Wall Street types, they are not seasoned traders or economists, yet the tech press seems to have done a much better job when it comes to Facebook than mainstream business oriented outlets. We said it would be ugly and we were right.