Facebook Inc (NASDAQ:FB) Falls Over 27% In Just 2-Weeks
Facebook Inc (NASDAQ:FB) is a classic example of a parachute that always had a technical problem attached to it.
The most popular IPO has just hit the ground after flying high at the IPO after the Company’s revenue issues were unearthed post the initial public offering.
The Company is having a serious revenue growth concern which has declined in the first quarter of the fiscal 2012 as compared to the prior year’s revenue growth. The underwriter of one of the biggest IPO’s had just after the IPO revised the revenue forecasts for Facebook downwards.
The social network site was already hit by a severe blow when in its IPO, GM had withdrawn its advertising from FB’s site following its IPO. FB is deep in trouble with the Company’s revenues not showing the growth in context with the growing users of the social site. Also, revenue growth has been affected by the growing use of Facebook on the mobile phones rather on the desktops.
The Company’s revenue generation from advertising is also not a majority revenue driver as seen in the Company’s effort to pull up its revenue by rolling out advertising services for mobile users which resulted in a futile effort.
The overhype of the Facebook created by the investors had made the Company create one of the biggest IPO’s of NASDAQ with the IPO price being $38. But, investors also knew that the Company’s revenue was going to be volatile.
Shares of Facebook Inc (NASDAQ:FB) has lost over 27% after its IPO to $27.72 and is trading at a low volume of 39.10 million shares as against the average trading volume of 143.43 million shares on revenue concerns.