Person stranded in the middle of the Atlantic ocean: ‘Water, water everywhere but not a drop to drink’ – Around 5pm SA time, trade in Facebook shares will start on the NYSE. The IPO was heavily oversubscribed and the company, now officially valued at 104Billion US$, is expected to increase it’s value substantially during it’s first day of trade.
If only a fraction of Facebook’s 901 Million users purchase shares, Facebook value may even double as demand for shares exceeds supply. Forbes reports that certain investors in Facebook shares have to wait 181 days before offering their shares for sale, this reasonably standard clause, means that shortages in Facebook shares, coupled with a very strong demand for shares, will drive up prices dramatically during the first few days of trade. Some analysts are speculating that prices will quickly rise from the initial us$38 level to us$40 and then to as much as somewhere in the fifty dollar range during the first day of trade. This means that by the weekend Facebook could be worth as much as us$130 to us$160 Billion.
Facebook still has a few sustainable revenue concerns and needs to innovate mobile revenue, the first of the social platforms that produces sustainable revenue streams from mobile devices will be the next big thing, after sliced bread, that is.
Why is there so much hype around Facebook? Users share a much more personal experience with Facebook than with Google, they log in and see and hear from some of their acquaintances, friends and family.