Saturday, August 25, 2012

Facebook Share Price Continues to Fall


Facebook's share price (despite getting a little lift from it's all time low of $18.75) still sits at an unrecognisable $19.41.
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Since we first reported on the Facebook share launch at $38 on the first day of issue, the price has continued to gradually decline.
There are some strong parallels between this and the dot com experiences of the past. In the end you always need to invest in businesses that have a proven model for income generation. 
Facebook strength of course is that hundreds of millions of people use it. No argument there. But how will the company continue to generate money and how will the continuing trend away from lap tops to mobiles and tablets.

As well as per recent reports, there will be upcomming 
expirations of the IPO lock-up periods which for a fixed period prevent Facebook employees from selling their own shares. When they do sell it is possible that the market will be flooded which may put further downward pressure on the share price.
Time will tell both long and short term what where it goes from here, but if history is any guide, I'm betting that Facebook will find a way to keep adding to it's value adding.

Until next time, good luck and good marketing.

Daniele.

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