Facebook Stock Not responsible for market landscape
Facebook was an overpriced stock wherein the pricing was done on the basis of hype rather than assessing the actual value of the stock.
Chuck Jaffe a market expert says, “The Facebook Stock debacle is not responsible for global warming and is not a sign of the apocalypse.”
Facebook stock has performed in an embarrassing fashion ever since the initial public offer has come to the market leading to a fluctuating behavior of the investors.
The episode of Facebook failure stock has probably encouraged the value stocks to become market leaders. Though there should be ideally no “cause and effect relationship” but the turmoil has surely brought the value stocks to the front.
The value stocks can be purchased at a compromise rate and wait for a longer period to enjoy benefits rather than waiting going for a company which needs support from the market to run itself.
Experts never regarded the Facebook Stock as a Value Stock even if it turns out to be cheaper but Facebook cannot be held responsible for the sliding market.
As of now Facebook is the last over-hyped IPO until the next one comes to the market.
Facebook’s performance was there in front of people right from beginning as the net income was low in the first quarter itself. Facebook came with a $100 billion market capitalization which did not seem enough.
There might be greater debacles in future but Facebook had brought great disappointments for the investors and hence the market too. The poor performance of the stock has broken the market.
People say that there are always two sides of an investment. One set of people will be happy and other side would not be happy. If half of the investors have come out unhappy then it might be good news for the market.
Study of the past trends reveals that most of the IPOs are overpriced. Fortunately, the reality of Facebook has been revealed to the world in no time. Investors have become more cautious than before.
Investors who thought and encouraged others to think that Facebook would yield greater benefits have encountered the hard realities.
Facebook episode has started a new era in the Stock Market and Investment Baking.