Facebook isn’t the only social network with stock that’s performing below expectations right now. In fact, most publicly listed social networks dropped in the wake of Facebook’s IPO last Friday. If you’re puzzled as to why, Chinese tech guru Kaifu Lee has a couple of theories for you (and everyone else who reads his weibo account):
Facebook listed, and social network stock prices dropped. I can think of two possible reasons for this. (1) Investors who were excited about social media in the past couldn’t buy Facebook shares, so they bought shares in Zynga, LinkedIn, Yelp, and RenRen instead. When the “real thing” appeared [i.e. when Facebook itself listed], they traded in their other social network stocks for Facebook shares. (2) Facebook’s first day of trading didn’t meet most people’s expectations, and [Facebook’s underwhelming performance] has brought disaster to similar stock offerings [because it affects the way investors are looking at social media in general].
I don’t know enough about the stock market to tell you whether Mr. Lee is right or not. But he’s a smart guy with an impressive background in the tech industry, so it’s always worth listening to what he has to say.
[via Sohu IT, Image Source]
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