Name: Max
Current Event Posting #4
Topic: Economy
Title: Facebook raises share price range after strong demand
Author: BBC
Publication Name: BBC
Day of Publication: May 15. 2012
Length: 500 words
Facebook, only a mere 8 years old, already has 900 million users worldwide. Last year alone, Facebook made $1 billion. With success can only come investors, and high demand for the Facebook stocks has pushed Facebook to raise the price. Currently, Facebook sells its shares for $28 to $35, but the price was raised to $34-$38. This change has raised Facebook's total value to above $100 billion. This makes Facebook worth more than US corporate giants Disney, Ford, and Kraft Foods, and rivals Amazon's current worth of $100 billion. Facebook hopes to sell 337.4 million shares, for a total profit of $12.1 billion if investors buy at the mid-point of $36. Mark Zuckerberg, Facebook's founder, still remains in control of the company despite the flotation, controlling over 57.3% of the voting power through his own shares and through voting agreements with other shareholders. Despite Facebook's apparent success, many question its ability to maintain a steady profit. Currently, Facebook makes only $1 billion, 1% of its prospective market value. Last month, Facebook reported a drop in revenue between quarters, a first of its kind for 2 years. In response, Facebook plans to invest more in the mobile market, an area that Facebook believes has the most potential. Facebook is still in the process of buying Instagram, a popular mobile app for photo sharing and editing, for $1 billion.
Since Facebook's creation in 2004, the social network boom has been unprecedented. Gaining almost 1 billion users in a mere 8 years, Facebook is a global icon as both a social network and a successful company. Its clear that, despite its already enormous gains, Facebook is still steadily growing. However, there are still signs that make me doubt this legacy of unbelievable profit can continue. With Facebook reporting its first loss in revenue in 2 years, its possible that the market for social networking has begun to slow, and I believe it was a smart choice for Facebook to make the move into the mobile industry. Nonetheless, Facebook's increase in share value is a clear indication of the companies success and its continued success for many years into the future.
Joshua
ReplyDeleteFacebook has become the new thing in recent years, having increased its users near exponentially. At a net worth of $100 billion, Facebook rivals companies such as amazon and throws companies such as Disney and Ford into the shadows. Though its' progress has been extremely impressive, the market of social networking has been known to move on quickly from one network to the next. Facebook seemed to be the exception to this trend. Recently, however, it received it's first loss in revenue in 2 years. Facebook is also making only 1% of its valued price.
comment 4
DeleteFacebook started as nothing more than a simple plan to connect students at Harvard University before Mark Zuckerberg took that idea from its owners and made it into a internet sensation. The once humble social networking site recently got its own place amongst the big names in Wall Street. Now Facebook has upstaged Disney, Kraft, and Ford. While these companies and others are turning green with envy, Facebook is turning green in a different sense: the enterprise is raising the price of its shares from $28-$35 to $34-$38, which has the potential to put the value of the company at $100 billion. Facebook is already on the road to the NASDAQ, rivaling even Amazon's stock value, and it's not stopping there: Facebook is extending its control to "mobile as an area for growth that the company will invest heavily in," having already purchased Instagram for 1 billion dollars. It's hard to believe that Zuckerberg's enterprise has come so far, and we can only ask ourselves how much farther it will go at this rate.
ReplyDeleteIt appears as though for all the hype about Facebook, it has already begun to crash. The IPO value has tanked in recent days dropping almost 18% within only three days. Its initial IPO had been heralded as the greatest of the century, but now some call it a conspiracy. It all began with a malfunction in the NASDAQ stock exchange preventing traders from selling or canceling buys at first. From a high cost of $45 per share, they now are selling for $28. Even so it is one of the greatest IPO's in history selling more than companies such as Disney and Ford. It even rivals the great Amazon in its worth. This unfortunetly may be all for nothing if the company does not get its act together and begin deciding where the business will head in the future.
ReplyDeleteIt seems as facebook has finally hit its peak and has begun to steadily level out. The company's decision to go public may have been in response to this approaching dip. They hope to increase profits by going public and opening its own stock value to the world. I don't understand how a company who has a net worth of 100 billion dollars only made 1 billion in profit last year. I would also like to point out that recently, Zuckerberg and other business magnets have been accused of pulling out their own stock right before the companies stock value dropped nearly 30%. This accusation of insider knowledge could lead to further depression of the company.
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