Facebook’s ambitious IPO loses luster on Wall Street
With the risk-taking start-up culture of social network Facebook and its high-flying ambitions apparently colliding with harsh market realities post its mid-May IPO, the company - which was the most valuable tech firm to hit Wall Street - is now worth just about one-half of what it was three months back.
With a strikingly ambitious IPO, Facebook started trading publicly on May 18 at $38 per share. However, with the social network fast losing its luster on Wall Street ever since its IPO, the shares of the company closed at just $20.01 on Monday.
About Facebook's IPO disaster - which the company's CEO Mark Zuckerberg, Chief Operations Officer Sheryl Sandberg, and Chief Financial Officer David Ebersman failed to avert -, Westwood Capital partner Dan Alpert said the "classic disease" which the social network is suffering from is that "it went public at too high a value."
According to Alpert, the biggest challenge which the Facebook executives now face is to convince the market that the social network is not merely a fad, and that its managers have a blueprint for generating profits.
Meanwhile, in the wake of the fact that Facebook is already trying to show investors that its business is being expanded aggressively, and it is investing in expensive engineers and data centers, Ebersman said during Facebook's first-ever earnings call late last month that the most important thing for the company is "to stay focused on the fact that we're the same company now as we were before."