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As investors return money invested in the purchase of stake in Facebook

Published: Thu, 08/09/2012 - 11:40
By: admin

The value of shares Facebook fell to $ 20 per share in early August. In mid-May, these securities are sold for $ 38 apiece. IPO's largest social network in the world has become one of the most successful in history, but the dynamics of stock prices after a Facebook IPO can not please investors.


The head of the social network Mark Zuckerberg said that almost one in ten is an account in Facebook fakes. The company's profit fell in the second quarter of 2012, and increased marketing expenses. Facebook also left some key employees. These are just some of the troubles faced by purchasers of shares of social networks in recent weeks.


How Facebook can return the management of stock price to the price of initial public offering?


First, Mark Zuckerberg and his team must conduct a public financial audit of the company. This will show investors and analysts that, despite recent difficulties, the state of the company is far from sorry. The social network has hundreds of millions of active users around the world, maintains its lead in the global market. The audit results can be used to improve the company's business model.


Secondly, Facebook should continue to seek new ways to monetize their success. Advertising revenue model will be fundamental in the near future, but the social network is simply obliged to find alternative sources of income. In this case Facebook in any case should not enter a paid registration. Such ill-considered steps can destroy the power of this company.


Third, the stock price will return to the Facebook offering price only if the company will avoid reckless spending. Mark Zuckerberg has achieved success without spending billions of dollars on marketing, so to revive the reputation of the network, these expenses are also not needed. Non-standard product, a unique opportunity for users, a virus - that is the actual path to the success of Facebook.


Shares of the Internet giant to grow by almost 100% from current levels to return to the offering price. Do not expect that investors will return the invested funds quickly. However, those who keep the shares for several years or decades, are more likely to be able to give his decision to participate in the IPO successful.