Facebook, a social networking site estimated to be worth billions, debuted on the public markets on May 19, 2012. It fell, however, far short of expectations, making a paltry $16 billion as opposed to the expected $100 billion cap and declining rapidly soon after.
The company’s loss in profits and inability to realize its goals are the consequences of a number of actions, from technical difficulties to a late opening, all of which have ultimately led to Facebook shares’ steep drop in worth. Indeed, the company finished at $38.23 dollars a share at the end of the day, a mere 23 cents above the initial offering price.
“There was definitely interest,” Sazia Mostafa, sophomore at LA Center for Enriched Studies, says. “But because of technical issues in registering stocks and excess of stocks in the market, the interest faded.”
Only days before Facebook stocks were scheduled to be released, a number of additional stocks were given to investors. “It killed the market,” Mostafa explains. “If you have more of a company’s stock than you expected, you don’t want to buy anymore. Investors tried to sell their excess stocks instead of buying.”
In addition, technical issues at NASDAQ Stock Market (NASDAQ) delayed the process and hampered share trading. Facebook was to begin selling stocks at 11 am on May 19, but was only opened up for trade at 11:30 am due to difficulties within the system. “A lot of problems started to accumulate,” Mostafa says. “People tried to sell their stocks or buy more, and NASDAQ wouldn’t register the demands. It destroyed Facebook’s chances of really succeeding on this market. It could have been huge. Tremendous. I don’t even know how much. But it wasn’t.”
Indeed, Facebook ended trading on its first day with relatively marginal profits at $16 billion, a fact that stunned the world. Although Facebook stocks were still traded in high volumes, the level of interaction and the profit margin was nowhere near the expected $100 billion goal for the company.
“It’s tragic. Technical difficulties and bad managing caused a could-have-been-successful event to not happen,” Mostafa reflects. “Facebook is huge, but it lost so much potential because of mismanagement.” Facebook suffered a significant reduction in its value as a company, despite remaining amongst the largest IPOs in the world. “We’re more skeptical now, even if none of this is Facebook’s fault,” Mostafa says. “At this point, we’re just watching and waiting.”
oooer someone finally wrote about this! although it seems a bit late considering when this happened, it still seems interesting.
just a few things to consider:
-the nut of the article is that “facebook crashes,” so that should be the first thing mentioned. then you move on to how it debuted, etc- start with what’s important (especially since that’s what you write in the headline).
-the second paragraph is all analysis/speculation/expert opinion- where did you get it? avoid sounding like it’s your opinion (even if it is) and cite some credible sources.
-quotes: there were a lot which is good! but there was a single source for all of them, which is not so good. get a variety of opinions, a variety of people (or at least two contrasting opinions), a teen, an adult, an economics major and someone who uses facebook just for fun. quotes are what make articles interesting!
-try to talk about the potential effect this will have. why is this event important? why should readers care?
other than that awesome!