This article is published on Monday in the Australian Financial review magazine. Which is one of the popular business magazine in a Australia. The CEO and founder of Facebook, Mark Zuckerberg, rings the bell at the Nasdaq stock market on Friday, as shares in the social media giant go on sale. Facebook, which has 900 million users, is valued at $104bn, more than the combined value of Nike and Goldma Sachs. Facebook is to sell shares at $38 each and this magazine clearly mention that the early facebook share holder drop by $41.50 decreasing to $38.50. one of the Australia’s biggest investment funds plans to dump its entire facebook stake quickly as analysts and fun managers predict the social media giant will struggle to boost returns. Queensland Investment Corporation, which manages more than $60 billion in assets and was an early investor in Facebook, said it had no plans to be a long-term investor, a sign of the scepticism in the investment community about Facebook’s high valuation.
Individual investors from Australia and around the world are keen on the stock.
Facebook was floated on the Nasdaq Stock Exchange by its founder and chief executive, Mark Zuckerberg, on Friday. The shares struggled to stay above the initial listing price of $US38 a share and closed the day up 0.6 per cent at $US38.23 a share.
QIC’s head of global private equity, Marcus Simpson, said the investment manager bought shares in Facebook long before it was hyped as one of the world’s top technology companies.
“We got into Facebook at such a low [price] point compared to now where it has a $US104 billion valuation,” he said. “So it means we’ve made many multiples and it’s been a great success.”
The departure of early investors such as QIC has been cited as a reason Facebook’s price failed to rise faster. Economic turmoil in Europe is also a factor. Even Facebook directors, including Accel Partners’ James Breyer and Peter Thiel, used the float to cut their stake in the company. Wilson Asset Management founder Geoff Wilson said the float was “grossly overvalued and an unproven concept in terms of making money compared to its valuation”.
Aberdeen Asset Management managing director Hugh Young said he’d rejected an offer of Facebook stocks based on governance and price.
Mr Simpson said: “In all these young tech companies you will definitely see volatility. Our journey with Facebook has been a good one and is probably coming to an end [and] we will seek to exit our shares as soon as they become liquid.”
The warnings from fund managers and analysts have not stopped retail investors from buying Facebook shares in record numbers. CommSec normally executes an average of 100 foreign share trades per night. The online broker traded a record 290 on Facebook when it floated.
“That’s a good deal more than we’ve ever done in any of the others even after accounting for Google and the like,” CommSec general manager of retail distribution Brian Phelps said. “Beyond the trades, our telephones have been ringing off the hook for the last fortnight and especially on opening night . . . and in the last two months we’ve trebled the foreign accounts we’re opening per day.”
He warned investors to treat Facebook as a long-term investment rather than a short-term money-spinner as the company figured out how to compete with Google and spend the money raised from the share listing.
By reviewing this article we can say that the face book, social network business is very successful in this time and its value is 104 billion in a share market due to the social network and internet flexibility, availability and demand of new generation. According to the market investor and share market analyzer they predict that the share of face book will be go rise and it will be value like as Google share which is top successful social information business in the world. Investor criticized total share value of facebook is $US 104 billion which is very high rate in a market because of demand of people to invest in share is also very high. I was amazed at that opening price, for a company that makes nothing and sells nothing except advertising in a social network. Investors, who cannot use their own judgment should never be compensated. Everyone knows that shares can go down as well as up. They should suck it up and get on with their rich lives. They cannot lose if they are compensated when the shares slump. Surely common sense prevails at some point doesn`t it. Before you buy shares you do your research and evaluate the price of those shares from that research. The ask price on these shares didn`t stack up from the get go......I also wonder how many of those people who bought in would be crying "stinking fish" if their shares had appreciated instead of depreciated !!. Has bounced back to $32.55 but that's no guarantee it's not heading down to 38c! Zuckerberg clearly planned to bail while the going was good. No faith in his own product evidently. Thus we can say that sharemarket and its value was differentiated by information technology, marketing, advertising and social connection.
References:-
http://www.dailymail.co.uk/news/article
guys plz dont be confused about this article, it is a recent news which was published on financial review on last monday...
ReplyDeletehere im going to connect between our information systems and the global social networking business in the context of share market where share value fluctuate before and after they announced in a public.
Great finally some of your work. My fingers are really cross for your last post.
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