With all of the Facebook talk going on this week in regards to the IPO, I figured I’d chime in and put my thoughts in about the big event. If you’ve been out of the loop or chosen to ignore what’s going on, catch up quickly by reading this post.
An IPO refers to an Initial Public Offering, when a private company goes public with their stock. Although Mark Zuckerberg, creator of Facebook remained adamant that FB would remain a private company, the tables have turned and the company is going public tomorrow!
Yesterday, in an interestingly-timed way, General Motors (GM)/Ford announced that they’re pulling their advertising from Facebook. Although it seems only a small fraction of the social networking site’s $3.7 billion ad revenue, GM spent approximately $10 million on Facebook ads last year. The withdraw of ad money from General Motors is a pretty big blow to the site, as it’s marked the third-biggest advertiser media-wise, behind AT&T and Proctor & Gamble.
A second swarm of reports came out post-GM announcement yesterday that Facebook insiders plan to cash out more than originally planned to help boost the size of their IPO. Weird? In fact, Facebook upped their original IPO amount by 25%.
Although Facebook has potential to have the biggest IPO in history, there is quite a bit of skepticism surrounding the major event. I was planning on dropping $20-$40 on one piece of the company (the actual amount has yet to be determined), but now I’m not so sure. We all know Facebook isn’t what it was 4-5 years ago when it was in its prime. With insiders pulling out and more companies turning elsewhere to spend their ad dollars, there is a lot of uncertainty.
Will you buy in? What are your predictions for tomorrow?