Thursday, May 24, 2012

The IPO: Did Facebook "Jump the Shark"?

Breaking news Monday May 29th, 2012: After opening May 18th with an IPO price of $38 and then trading up to about $44, less than two weeks later the stock with the ticker symbol FB is now incredibly trading with a 2-handle.

This helps serve to confirm that it does indeed appear that Facebook may have jumped the proverbial shark at least when it comes to what the company is worth, while it remains to be seen if this public offering of stock may also mark a top in the popularity of the brand!


The Facebook IPO and a "Jumping the Shark" moment!

For those like me that grew up watching Happy Days on TV you know exactly what a "Jumping the Shark" moment is.

It's that time when something or someone pushes the envelope just a little too far or runs out of credible ideas and themes and goes from being beloved to being reviled or ridiculed.

On Happy Days "that" moment actually came when they had Fonzie jumping over a shark on water skis and it was all downhill after that.

Who knows how much longer the series could have gone on if instead of making it over they had him landing in the middle of the shark tank, but that is of course water under the proverbial bridge.

For Lebron James, his "moment" was a prime time television special modestly called "The Decision" (from a PR perspective and certainly not from a talent one)!

For Facebook could that turning point from a product that is used and loved by some portion of 900 million people have been its IPO?

Not because there is anything wrong with insiders cashing out some of their money although there is something wrong both legally and public relations wise if you share company information with some potential investors and not others.

And not because addicted users will stop using.

It's because the due diligence that was done on the company and its business model leading up to the IPO may have raised the red flag and made potential advertisers and others the company hopes to monetize question the overall value of the Facebook model and platform.

If that happens, this would in turn put even more pressure on performance going forward and potentially the stock price as well.

For Mark Zuckerberg the $38 IPO price may have been the best trade he will make for at least a portion of his holdings.

For other insiders who held on and sold nothing, they may look back on this potential "Jump the Shark" moment and wish that they had!

No comments :

Post a Comment