With Facebook's much-hyped initial public offering (IPO) failing to meet the expectations, a number of disquieting questions have sprung up of late about the botched offering of the social network's stock and its potential impact on other companies planning their IPO.
While experts are of the opinion that there were quite a few slip-ups in Facebook's public debut, it is largely being believed that one of the most apparent missteps was the company's decision to set a `too high' opening price for its shares.
As a result, rather than witnessing a leap on the IPO day last Friday, Facebook's shares increased barely 23 cents, from $38 to $38.23. And, what's worse, the stock has mostly been plunging since then --- closing at $31.91 on May
25; marking a 16 percent fall from the IPO price.
With the Facebook IPO clearly failing to fare well - just like some of the other recent IPOs, the Zynga and Groupon IPOs in particular -, experts feel that the Facebook IPO debacle will apparently put off other companies' IPO plans in the near future.
With research firm Ipreo already having revealed that there are only about 63 companies which are currently planning their IPO - as against the last year figure of 108 -, Reena Aggarwal, a finance professor at Georgetown University said that while a successful Facebook IPO "would have brought back confidence in the market," the companies thinking of a public debut might now say, "`Forget it, I'm not going public'!"