Investors demotivated after Facebook disaster
A comparative study of Stock market reveals about 19 Initial Public Offers were introduced to the market during this period last year. This year even after a month of Facebook IPO there is no sign of a new one till date.
According to a source the 14 IPOs have been delayed or deferred looking at the disaster of Facebook episode.
The market has not witnessed any offerings in the last week. Market is responding terribly to the European Debt crisis. The most scared are the technology companies who do not have any confidence to come up with public issues.
Francis Gaskins, President of researcher IPO desktop says, “It has wiped the counter clean for the time being.”
Internet Industry had enjoyed the investors of confidence sometime in late 1990s which continued for a decade. The investment had gone down in the later years. Stock market had high hopes with Facebook Stock entering the market. Experts had thought of regaining investors’ confidence in the technology market.
$16 billion IPO of Facebook has brought disasters to the market as the share prices kept falling since day one. Investors have lost hopes in the technology sector and in the Stock Market.
Sam Hamadeh, CEO of Price, a research firm says, “Everybody’s been told to wait till May 18. Facebook had brought excitement to the market and investors.”
At the end of the first trading day the share closed at a price of $38.23. The fall continued till the prices became as low as $25.52.
Facebook seems to be competing with other public internet companies which have not been performing well in the recent past. They have been performing below their IPO prices.
May 18 is one of the bad days of the Stock Market as Facebook IPO was introduced that day. Due to technical errors Nasdaq had started trading after half an hour from its scheduled time.
Facebook episode has generated a sense of distrust for any new and similar IPOs coming to the market. Investors are not sure of making a new investment in this sector. Rather there are instances when they seem to be withdrawing their previous investments. They are diverging the investments. Other sectors are preferred by the investors to be secured and earn a little profit out of their investments.