The Craze of Facebook and it's IPO

Facebook is the social networking site, which was launched in February 2004 and it is operated and privately owned by Facebook, Inc.

This site currently has over a billion active users. People join this site to get in touch with their ex-classmates who are spread out in this world. It helps them know about their whereabouts. How are they? What are they doing? etc. It helps people stay connected via facebook statuses and pictures and also can get an insight into their lives and likes.

It is crisp communication yet addictive. Most people have their facebook accounts logged in and check in at least 10 times in an hour. Surprisingly, people have not got bored 'cause their friends always has something or the other to post or comment on or click on LIKE button.

Facebook has become such a hit that anyone can log on and make their account. It's as simple as writing the letters, A-B-C. 'Cause of it's simplicity; many have also got attached to it. If they post a picture or a status, they expect people to click on the LIKE button or comment. Expectations have also led to many unfortunate incidents.

Amidst the sweet and sour experiences of facebook. This company was blown out of proportion when it was nearing it's Initial Public Offering (IPO). People thought this was the BEST deal of the year and expected to be a boost for the economy. People invested their hard earned and tax deductible in this IPO hoping to make some extra cash.

Unfortunately, we all know what happened. Facebook released with a bang at $42 per share but took a deep slide to $27.86 (1st June, 2012)

Who is to be blamed for this? Did the Analysts over evaluate the price of the IPO?

People are definitely disappointed about how it went down. This has effected many sites, which were supposed to go IPO this summer. Example is Kayak.com. They have decided to delay their initial public offering 'cause of the above scenario. The trust of the people is important for any company to go public.

Many analysts believe that IPO's are usually over priced and people should examine the financial statements and read annual reports and research to understand the factors that will cause the company to be successful. Do not buy a stock because it is popular or hyped.

Facebook is popular amongst all age groups and maybe that popularity was difficult to differentiate between using Facebook on a daily basis versus the value of the company/stock.

Facebook was understood well by its users since the company had gained access to their daily lives. This company sold their personal information to advertisers and did it with a happy face. Facebook also allowed people to develop their pages and help them propaganda their mission to the world. Thus, Facebook ran the world.

This made the analysts hype about this company and thus the hype about this IPO.

There are some people who lost quite a bit of their hard earned money over this hyped IPO but the craze of using Facebook is still going strong.

I am pretty sure that buying the stock of this company would have been a better bet than investing in the over hyped IPO.