Analyst Blames Parents For Facebook's Unconvincing IPO

 

Facebook was hardly the most adored of companies before going public in May, but few could have predicted the landslide in stock price that has greeted the company since it started trading on May 18. Wiping billions of dollars from founder Zuckerberg’s personal fortune; the social network company is now the second-worst performer of all IPOs in the US so far this year (according to IPOScoop.com).

Shares in the company have now fallen 43% in price below the $38 initial offering. But while some will point the fingers at the way in which the company has struggled to show signs of growth within the mobile market and user gain, another analyst is pointing the fingers at a very different group: Facebook’s parents.

In an email sent to CNN, managing director of equity research at Global Equities Research LLC, Trip Chowdry proposed, “Kids are spending less time on Facebook, as their parents are also now on Facebook. It is a psychological reality, that after a certain age, kids are less inclined to hangout where their parents are.”

While we don’t profess to be ‘down with the kids’, it’s easy to understand where Chowdry is coming from. There’s no doubting that Facebook has lost some of that ‘cool’ that Zuckerberg and his co-founders strived so desperately to hold onto at the time of the social network’s arrival. At the time reserved only for college students but having since opened up to first high school students and then to adults, Facebook’s unrivalled success could so easily have come at a big cost. And according to Chowdry in his email, the social network will struggle to redeem its image for the great many of America’s youth.

“FB may be cool again for the younger people, if FB bans parents from [it], but that is impossible.” Instead, he predicts that users will look for a new ‘hangout’, with Twitter seemingly overtaking Facebook in the ‘cool’ stakes. So there you go, Mark, you may well have the parents of this world to blame for wiping billions off your personal fortune.

Richard Birkett

Source: CNN