Leading up to the IPO, Facebook had a lot of hype surrounding it. The company was valued at over $100 billion, and many investors were eager to get in on the action. The IPO was expected to be a huge success, but it didn’t turn out that way.
In the days leading up to the IPO, Facebook and its underwriters increased the number of shares they planned to sell, and at a higher price than originally anticipated. This led to an overvalued stock that quickly dropped in value once it started trading. The stock opened at $38 per share and briefly rose to $45 but quickly fell below the IPO price and hovered around $33 for several weeks.
The initial drop in value caused many investors to panic and sell their shares, which only added to the downward trend. Facebook’s reputation took a hit as well, with many critics calling it a “failed” IPO. Investors who had bought into the hype and invested in the company were left with losses instead of the gains they had anticipated.
Despite the initial setbacks, Facebook eventually recovered its value and began to see steady growth in the years following its IPO. In fact, as of 2021, the company has a market capitalization of over $800 billion and is one of the most valuable companies in the world.
One of the main reasons for Facebook’s success after the IPO has been its ability to adapt and innovate. The company has continued to roll out new features and products, such as Instagram and WhatsApp, which have helped to keep users engaged and attracted new users to the platform.
Another factor that has contributed to Facebook’s success is the sheer size of its user base. With over 2.8 billion monthly active users, the company has become a staple of modern communication and social interaction. This has allowed Facebook to leverage its scale and size to maintain its dominant position in the social media landscape.
However, the IPO of Facebook also highlighted some of the challenges that come with going public. As a publicly traded company, Facebook is now subject to more scrutiny and regulation. It must answer to shareholders and stakeholders alike, and its every move is carefully monitored and analyzed by the public.
In addition, Facebook’s growth has come with some controversies and challenges. The company has faced criticism for its data privacy practices, the spread of misinformation and hate speech on its platform, and its impact on mental health and well-being.
Despite these challenges, Facebook has remained a force to be reckoned with in the tech industry. Its IPO may have had a rocky start, but the company has since proven its durability and adaptability. As it continues to evolve and innovate, it will be interesting to see what the future holds for Facebook and its role in shaping the world of social media and communication.