Facebook’s IPO letdown causes others to rethink plans
By Hayley Tsukayama,
Facebook’s IPO was supposed to be the deal of the year. It was expected to be a boost for the state of California. And it was poised to become the bellwether moment for Web 2.0 companies looking to make it on the stock market.
We all know what happened. Facebook came roaring out of the gate two weeks ago, jumping to $42 per share before taking a deep slide. On Thursday, the stock was trading at new lows, though it recovered slightly to close at $29.63 per share.
The bellwether moment turned negative.
Whether Facebook’s performance can be blamed on Nasdaq’s technical glitches, analysts’ overvaluation of the IPO price, concerns about the company’s business model and chief executive Mark Zuckerberg’s fitness to lead a public company, it’s safe to say that people are disappointed about how it all went down and how it’s going now.
Some are more disappointed than others. The New York Times reported that the travel Web site Kayak.com had decided to delay its own initial public offering. An unnamed person “briefed on the matter” told DealBook that the company’s roadshow had been planned for this week, but has been postponed.
Kayak did not immediately respond to a request for comment on the timing of its IPO.
The state of California, which had included a possible $2.1 billion tax windfall from the Facebook IPO in its revised budget, noted that it will be watching the the social network’s progress on the market. But the state will not rework its tax revenue estimates, according to the Los Angeles Times.
H.D. Palmer, a spokesman for Gov. Jerry Brown’s Department of Finance, told L.A. Times reporter Chris Megarian, “We’ve kept an eye on it –- but at the same time realizing that a) it’s only been trading for less than two weeks, and b) stock prices will fluctuate -- both down as well as up relative to an opening price.”