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Facebook’s Market Value Plummets
Other | Friday 3rd August 2012 | Osh
Shares reach levels that few thought were possible only three months ago
Facebook been thrown under the spotlight recently for two reasons: one, apparently over 83 million facebook accounts, that’s around the population of Egypt, have been discovered as fake or of questionable legitimacy. The second, shares in Facebook have taken a bit of a fall, dipping below $20 for the first time since emerging onto Wall Street in May.
On Thursday the value was 47% from its initial public offering of $38, reaching lows of $19.82 in an afternoon of heavy trading and fluctuating stocks, eventually rallying close to $20.04 by the end of the day.
Facebook’s freefall began after the disappointing earnings report last week, revealing that costs went up dramatically in the second quarter, much greater than analysts were expecting. According to Wedbush Securities analyst Michael Pachter, the momentum turned against Facebook after the company revealed that it intended to increase spending in marketing and sales in order to wring more ad revenue from its 955 million users, which scared off buyers.
That being said, fuckin hell it's just a website, innit? What did people expect from it? It's not exactly a vital resource, so maybe going public with it was an overreaching move to cash in before it gets surpassed by the next big thing. If history is a teacher, social networks run in cycles, so odds are the next one is just round the corner, waiting to do to FB what itself did to Myspace. The Internet is a cold, cruel place - indeed a jungle. #justsayin
