Facebook Inc (NASDAQ:FB) has just cleared the one month milestone since its IPO. At least some news today can leave the company slightly more optimistic about its future. Facebook’s initial public offering has not been the worst offering of all time. That honour falls to Giant Interactive Group (NYSE:GA).
Facebook’s IPO is, however, the second worst IPO of all time as of its first month. The company lost around 26% as of yesterday’s close. Giant Interactive, which is a Chinese online gaming company, lost 30% of its value in the first month of its IPO back in 2007.
Qualivian Investment Partners Up 30% YTD; Long ORLY Thesis
Qualivian Investment Partners commentary for the second quarter ended July 30, 2020. Q2 2020 hedge fund letters, conferences and more “Short-term investors will accept a 20% gain because they didn’t spend the time to develop the conviction and foresight to see the next 500%.” - Ian Cassell Executive Summary Readers of investment letters fall into Read More
Additionally, if one measures Facebook compared to other social media IPOs, RenRen has been the worst IPO in the sector, as we noted earlier this week.
The data, which was gathered by Dealogic, was reported in the Wall Street Journal today. It covers IPOs above $1 billion. That performance is based on a turn upwards in Facebook’s performance that has come mostly in the past week. The stock is looking to achieve its best week ever.
Through yesterday Facebook Inc (NASDAQ:FB)’s shares were up 4.4% for the week. Today the firm’s shares are up by around 1.8% at time of writing. The firm has yet to finish a week up and it looks like this might be its first. Facebook investors are hoping that this week has marked the company’s bottom.
The company has been through some inevitable turmoil in recent weeks as disgruntled investors seek retribution for their losses in the offering. Meanwhile much criticism has been levelled at the social network’s business model.
Recent rumours of changes in that business model have likewise been received with little optimism. A Facebook smart phone was floated a few weeks ago to little excitement from the tech industry or investors in the company. Analysts were worried that there would be little demand for the device in the already saturated smart phone market.
A second rumour of Facebook Inc (NASDAQ:FB) starting a third party advertising platform, was better received but still ignited little movement in the stock. That market is even more saturated than the smart phone sector and Google’s dominance is overwhelming.
Despite being only suffering the second biggest offering losses of all time it appears the effect on the internet IPO market has been powerful. Goldman Sachs Group (NYSE:GS) co-head of investment banking for global telecommunications has said it is unlikely there will be another internet IPO before labour day.
Facebook’s first month as a publicly traded company has come to a close but the problems that have hurt it in that time have not gone away. It is still vulnerable in many senses but it seems investors may be looking forward to the firm’s expected growth as inspiration.