In the last year or so Facebook has lost quite a bit of its charm, overtaken by the more exciting and lively twitter. I have seen updates on twitter such as “when I wake up in the morning I log on to Facebook, watch the circle thing turn, log off and go on to twitter’ there are even Facebook updates of people saying how boring Facebook is.
So it came as a surprise to many that Facebook was even offering its initial public offering let alone increasing it by 25% to a size of some 421 million shares. This means the social network could raise a total of between $14.32 billion and 18.47 billion. In its previous offering of 337.4 million shares it would only be able to raise between $5.04 billion and $6.30 billion.
There are several third parties that plan to unload part of their stakes including Goldman Sachs, PayPal co-founder Peter Thiel, Accep Partners and Microsoft. This coupled by concerns of the networks ability to stream in revenue (especially after GM announced it will be pulling out from advertising on Facebook) has economists seeing the offering as more of a public spectacle, media event and cultural movement instead of an IPO. ouch….
I was also initially excited about buying into Facebook’s shares but social media is unpredictable, and just because its hot today doesn’t mean it will be hot or worth anything tomorrow. Good luck to those who will be buying though.