Why Facebook receives conflicting views on its IPO performance? – Part 1

Only one day left in the biggest initial public offering in the history of internet-based companies, if not the history of stock market in the US of A. Facebook is scheduled to price its upcoming stock on Thursday, that is today and on Friday the company, along with its major underwriter JP Morgan Chase, is planned to unleash the stock in market for investors.

As the IPO date approaches its opening date, the speculations on its success or failure are reaching dazzling heights. There are diverse reports from the likes of Bloomberg and Reuters are either discouraging or encouraging the offering before it even starts.

According to Bloomberg, the Wall Street giant, the IPO is going to be an utter failure as more and more investors are bailing on the social network due to the lack of defined source of income. However, according to Reuters, the company has received so many pre-orders on the stock that the over 400 million shares might become short on the first day of stock market operations.

Bloomberg today said it could stop taking orders for its IPO as early as tomorrow, wrapping up ahead of schedule. On the other hand, Reuter released a story that said that the stock was oversubscribed — meaning that demand for the stock outpaced the number of shares available.

However, as much as the demand for stock is fluctuating if both of these version are considered, so is the question marks on the source of income and goodwill of the company in the market.

There are many factors involved in a company’s success other than the source of revenues, though profits are the main factor. The image of the company in the market and in the eye of the consumer and the society on the whole matters as well.

Moreover, the value of the enterprise in terms of longevity in the business is of foremost importance.

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Posted by Usman Khalid on May 17 2012. Filed under Business, Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.