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Finance & Accounting
Pages 10 (2510 words)
“Since Facebook's initial public offering on May 18, 2012, the social network's valuation has fallen about 32%, from $104 billion to about $71 billion. The stock fell another 4% on Tuesday to $25.87” (Efrati & Tam).
Even though Google like companies tried to stop Facebook’s progress with the help of Google plus like social networks, such efforts impacted only moderately upon Facebook. “Between 2009 and 2010, the company's revenue nearly tripled. In the first quarter of this year, revenue climbed 44 percent. In the second quarter, Facebook Inc.'s revenue increased 32 percent to $1.18 billion from $895 million a year earlier” (“Quarter earnings: Facebook stock crashes”, n.p.) Even though Facebook’s’ progress was untroubled until recent times, some of the most recent reports show that Facebook is facing some severe problems at present. The interests of people in Facebook shares have been diminishing slowly even though the company management is working hard to bring the company back on track. Facebook investor’s concern is about the slow revenue growth of the company in recent times. Even though recession like economic problems was almost over, Facebook still shows no signs of revival. Analysts expect lower revenue of $1.16 billion in the fourth quarter of 2012 for Facebook (“Quarter earnings: Facebook stock crashes”, n.p.). The decline of share value of Facebook has surprised many people. Even though such a decline was expected, nobody thought that it may take place in near future itself. Plenty of reasons were cited for the unexpected and sharp decline of share value of Facebook. This paper analyses some of the major reasons of the decline of the share value of Facebook. ...
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