By Kelli Bennett, Editorial Intern
Even though millions share status updates with dedicated Facebook friends and click to “like” a picture of a weekend celebration daily, many are questioning why the popular social media website’s shares did not sell higher on Nasdaq. Facebook announced it would be selling 421,233,615 shares during Nasdaq’s opening on Friday, May 18th. According to IPO Day Closing price predictions, a share of FB (abbreviated by investors) closed last Friday at 38.23. This was a mere +0.37 increase. This amount is impressive compared to Facebook shares falling as low as $33 early this week.
Causes of the decrease are still unknown. Though we are engulfed in our interactive Facebook timelines, investors don’t seem too interested as they search for reasons to invest in FB shares. Some speculate the share price decrease is due to the lack of professionalism displayed by Mark Zuckerberg, founder of Facebook. Todd Schoenberger of the BlackBay Group told Yahoo Finances, “Facebook kind of has this reputation of just being this pre-teen site. It doesn’t help that the CEO of the company is walking around wearing a hoodie.”
Jeff Macke of Yahoo Finance believes another reason for FB’s share decrease is the lack of businesses and older users. Facebook reported that the growing tablet cell phone segment, which is comprised of younger users, is not generating enough revenue.
Part of me is surprised by Facebook’s current share price. With the site’s more than 800 million users making up 15 percent of the world population, and potential for ad revenue, you’d think investors would jump on the chance to earn more money.
Whether the reasoning for Facebook’s slow Nasdaq ride can be attributed to uncertainty about the founder’s professionalism, a growing tablet cell phone segment or a general disinterest in the social media site, it will be interesting to follow the decisions investors will make in the coming weeks.