Social Media - A bright future or a falling trends

Recently, Social Media industry leader Facebook formally launched to public market, but 2 recent issue dramatly shaked the public expectation to the Social Media. It was a happy hour when Facebook offically launched to public market on 18 May 2012.The NASDAQ opening bell is rung remotely from Facebook's California headquarters by Mark Zuckerberg and other Facebook executives as the company makes its debut on the stock market. In this IPO, Facebook offered 15 per cent of its available stock in the IPO, so there was enough to meet demand. The other 85 per cent is still owned by Zuckerberg and other Facebook executives, employees and early investors. The IPO successfully help Facebook become the one of the most valueable company which has a market value of about 105 billion USD, more than Amazon.com, McDonald's and Silicon Valley stalwarts Hewlett-Packard and Cisco.

 

Facebook Rings Nasdaq Opening Bell May 18th 2012

(1) Facebook share price fast decreased since the fist day that Facebook launched to the market. The dramatically decrease of Facebook share price dramatically shake the investors' confiderence to the future of social media industry.

In the first trading day, Facebook slight increased 23 cents or 0.6%, to close at 38.23 USD. Since the second trading day,  downturn become the only topic of Facebook price during following 12 weeks

Here's are the closing prices each week since the first day of trading on May 18:
— May 25: Closed at $31.91, down 17 percent for the week.
— June 1: Closed at $27.72, down 13 percent for the week.
— June 8: Closed at $27.10, down 2.2 percent for the week.
— June 15: Closed at $30.01, up 11 percent for the week.
— June 22: Closed at $33.05, up 10 percent for the week.
— June 29: Closed at $31.09, down 5.9 percent for the week.
— July 6: Closed at $31.73, up 2.1 percent for the week.
— July 13: Closed at $30.72, down 3.2 percent for the week.
— July 20: Closed at $28.76, down 6.4 percent for the week.
— July 27: Closed at $23.71, down 18 percent for the week.
— Aug. 3: Closed at $21.09, down 11 percent for the week.
— Aug. 10: Closed at $21.81, up 3.4 percent for the week.
— Aug. 17: Closed at $19.05, down 13 percent for the week.
— Aug. 24: Closed at $19.41, up 1.9 percent for the week.
— Aug. 31: Closed at $18.06, down 7 percent for the week.
— Sept. 7: Closed at $18.98, up 5.1 percent for the week.
— Sept. 14: Closed at $22, up 16 percent for the week.
__ Sept. 21: Closed at $22.86, up 3.9 percent for the week.
— Sept. 28: Closed at $21.66, down 5.3 percent for the week.
— Oct. 5: Closed at $20.91, down 3.5 percent for the week.

Share price trends since the first tradiing day.

The current Facebook share price slipped to 20.32 USD. Some market Analysts forcasted the share price will raise to 60 USD per share after Facebook released the IPO offer price.  But, the dramatically decreased share price failed most investors' espectation.

Forbes editors examine the fallout following the social networking behemoth's stock market tumble.

 

 Facebook's highly-anticipated IPO was plagued with problems, potentially costing thousands of dollars to many small investors and further damaging Wall Street's reputation on Main Street.

(2)General Moto withdrawn the advistment investment from Facebook but kept the free company page only.

 

General Motor is the third largest advertiser in the US and spends around 40 million on Facebook per year. 25% of these amount is for advertising and rest goes on maintaining. The rest of 30 milliong spended on maintaining those pages. General Motor now has withdrawn the ads from Facebook because they found the Social Media such as Facebook may unable material impact on their customers. Based on the words from person from General Motor, he said "In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers."

In conclusion, after Fackbook suffered these two BIG ISSUE market analysts start doubt the market future of social media. Comments from Sir Martin Sorrell, chief executive of the world's largest advertising holding group WPP, he said: "Facebook, Google+, Twitter are advanced forms of social interaction. We used to write letters to each other and now we correspond through Facebook and Twitter. If you interrupt that with a message you may run into trouble." He said that he had some "fundamental doubts" about the ability to monetise social platforms. 

So, Whats Your Opinion? Dose Social Media Is the Bright Future or Just the Market Bubble?

Reference
The Associated Press 2012, Weekly changes in Facebook stock prices, viewed on 11 September, http://finance.yahoo.com/news/weekly-changes-facebook-stock-prices-220504348--finance.html

Wrenn, E 2012, The great Facebook purge: Social network begins clearing out the 80million fake profiles which make up 10% of all users, viewed on 11 September, http://www.dailymail.co.uk/sciencetech/article-2209485/Facebook-share-price-hits-time-LOW-revealing-83million-FAKE-accounts.html.

 

Worstall, T 2012, The Fall In Facebook's Share Price Doesn't Make Sense, viewed on 11 September, http://www.forbes.com/sites/timworstall/2012/09/01/the-fall-in-facebooks-share-price-doesnt-make-sense/.