Facebook: The Aftermath, what’s next?
In recent days we have seen Facebook’s IPO’s fall below 36USD/share, a falling in social media stocks and general negative commentary on the IPO in general. It all seems pretty bleak, but after my last post I realize that I may have been a little harsh.
When I look back at Facebook as a platform, it is really unique. There are many apps, groups and games that really are pulling the global population together (and sometimes apart). From an investor’s point of view this means nothing if no income results.
From the global population’s perspective there really is a greater good because of Facebook. Think of apps such as “Causes” or even the Facebook page of your favorite rock group there is really a scope for us all to give, share, care, create, like etc. Product development at Facebook has created a platform that we can all use to add to the greater good. Be wonderful if it can continue on this path.
Facebook has been about developing products. Many of which are useful and beneficial. Hopefully the new shareholders of will be able to find a balance between profits and Facebook’s product development. If product development in the future slows or is sidestepped I really think we’ll be worse off. It takes time for products to be developed and eventually turn a profit. Most products never make a profit, but still can be useful. Let’s just hope we don’t see some aspects from pre the IPO days gutted for profits.
What are your thoughts?
Facebook’s IPO: The Shame of it All
Facebook’s IPO is great lesson of “me first, the rest later” mode of thinking. Let me explain. Firstly let’s look at who benefited from the IPO? Secondly, let’s look who will suffer from the IPO. Lastly, let’s look at what the future of social media and social platforms holds as a result of this IPO.
To begin with, I am not a techie per se but have much respect for the opportunities that social media and social platforms have provided in the last decade. I come from an age where the fax and telex where king. During this time markets for products were not at all global and opportunities to grow markets were limited. Friendships during this period were real, between real people and conversations took place with ‘real’ people. The advent of social media and social platforms has expanded all of this exponentially and globally. That is great and all of my respect goes to the founders of this brave new world.
Now back to Facebook’s IPO. You really have to congratulate Zuk, his team and his bankers. They managed to benefit the initial shareholders (basically themselves) immensely. Although the IPO was lackluster, they managed to raise multi-billions in capital. So, Zuk becomes one of the wealthiest people on the planet; those close to him and Facebook become millionaires and the bankers well they get their huge fees. I think you can see where I am going with this. The “me first” gang of Zuk, his team and bankers got what they wanted, big bucks. Big bucks based on 100 times earnings, hype, little corporate assets and a poor earnings potential. Damn they got a good deal.
The rest of us, many Facebook users, idly watch by the sidelines. All the posts, likes and what not are freely given to Facebook. For what? So, Zuk, his team and the Bankers can simply rake it in. Actually, I don’t really care. I knew all along that by being on Facebook my data was free for all and that Facebook would use it to sell to advertisers. For me the biggest losers are not the users of Facebook. The real losers I think are other social media platform developers who need capital from the VC’s and the stock market. Facebook’s IPO was pure profiteering. Sure we all want to make a profit. However, with all the hype, the capital markets soon realized all the BS around the IPO and acted accordingly. In the future I feel that potential investors will discount investments into up and coming social media platforms. I come to this conclusion based on the outcome of Facebook’s IPO. I hope I am wrong.
What of the future then? I think there is real potential for less future funding for up and coming social media platforms. We need more platforms to make the social media world more competitive, so the services and offerings in the social media world improve. If not, we are going to be left with only a few or a small collection of platforms that we are forced to use. Given that Facebook is somewhat of a public company now, it will be forced to prove itself to investors. Probably it will be more aggressive in selling our data on the sly. On a more positive note, hopefully with all this capital they may become altruistic and start a cool incubator for other techies. That would be cool, but unlikely. Zuk doesn’t strike me as an altruistic guy or a person who likes competition. He really is a “me first” kind of the person. Gosh, how judgmental of me. Probably they will use the new earned cash for social media world domination. I am getting bleak now. So in the end, my opinion and mine only is that the consequence of the IPO is that the “me first” gang made it rich with the expense of the rest. What a shame. Well it is what it is!
Many thanks to those of you that read to end of my rambling! Enjoy the rest of your weekend.
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