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Will the Facebook IPO bubble burst?

Tim Gibbon (Social Media Portal (SMP)) - 21 May 2012

Will the Facebook IPO bubble burst?


Even before the recent Facebook IPO, there has been much speculation about the future of dot coms, whether they would experience boom and bust again.   

Although there has been a number of IPOs this year, Facebook is the one that has peeked more interest above anything else.  This infographic from Betterment entitled ?The Facebook IPO bubble? takes a look at the Facebook IPO in addition to some other recent ones.

The likes of Groupon, LinkedIn, Pandora and Zynga highlighted as some of the major IPOs this year, although there have been plenty of others that slipped under the radar such as Yelp. It?s worth noting that Groupon (its IPO was November 2011) has been one of the worst performers so far this year as listed on the Nasdaq performance chart.  

Nasdaq performance chart image

A CNNMoney article reveals that out of 31 IPOs since the beginning of 2011, 22 are trading below their closing price from the day they initially went public.  The article continues to reveal that 16 are trading below their offer price, so given this statistic; it doesn?t instil confidence in technology IPOs.

CNNMoney IPO chart

With such a track record of technology companies not performing well, it could spell doom and gloom.  However, for unimpressive returns, there are success stories, Amazon, eBay and Google as examples.  Whether Facebook can be another technology company that can buck the trend obviously remains to be seen.

The Facebook IPO bubble infographic

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