The flavor of the week in tech news is still Facebook, and its performance, now that their IPO has come and gone with all the force of a paper airplane. Stocks hovered above the original $38 asking price on Friday, the first day of trading for the internet giant. Some say it was an empty victory just to stay afloat, because investors like Morgan Stanley were underwriting the IPO and purchased stocks to keep the price above its starting value throughout the day.
Then the weekend came. If you’ve ever woken up the morning after a crazy party and had to deal with a few bad decisions, you ought to know what life was like for major investors.
When the markets opened Monday, FB shares had already fallen from $38 to $36.50 per share over the weekend, and it continued to slide into the $35 range through the afternoon. This is great news for any long-term investors riding out the market buzz and waiting for shares to drop to affordable levels—that is, anyone not heavily vested in Facebook yet. For new investors that bought up stocks at its higher points on Friday, major interests and short-selling hopefuls looking to flip the stock in a few days, it’s awful.
Not only are current shareholders taking a loss, but the stock’s performance wasn’t in-line with other tech stocks throughout the day. Futures and major indexes were on the up through Monday’s trading day, meaning investors are confidently buying into other companies. If investors are happy with everything but Facebook, the results are pretty clear: nobody wants it.
The question is, why not? With one of the most recognizable names and one of the most potentially lucrative content marketing platforms on the market, Facebook is a no-brainer for anyone looking to invest in tech.
The problem that is deterring investors away from the stock is that for everything Facebook could do well, and has the potential to do in the future, it isn’t doing it now.
As far as investors see, Facebook isn’t planning on doing any of the things it’s potentially capable of any time soon.
So what’s next for Facebook? Forbes is already echoing what I mentioned last Tuesday: Facebook has to focus on advertising. All of the data they have on their users can be tied into amazing third-party advertising opportunities, but it isn’t yet. The potential is there, and it’s probably simple to implement.
The moral hurdle of “selling” information is going to be tough for Zuckerberg to tackle considering his user-minded approach to his site…even though he’s participating in it lightly already. Nobody likes the idea of being tracked online, but Facebook does it exceptionally well, and investors will push them into monetizing it.
Forbes also proposes a few other interesting ideas.
Facebook could compete directly with Google by crafting their own “smarter” search engine system using all of their users’ behavioral data. Facebook also needs to consider breaking into China, either through their own services or by buying regional networks and applying the Facebook brand to them. They could also use location data to make elegant, useful local uses for their platform, and do more with their mobile platform with this data.
Whatever they do, they’re going to have to produce results for investors or their stock will sink further and become more unattractive for anyone interested. Personally, I still think this IPO is good for small business and anyone looking to advertise with the service. Facebook has to look at how they deliver your ads to your potential customers and find ways to do it better, at no cost to you. I’m no expert, but if Forbes agrees with me that Facebook needs to hone in on better conversions from content, I’d say I’m on to something.
The world of content marketing has a lot to learn from Facebook, and Facebook has a lot to learn from it. All that’s left now is to wait and see if these two powers “Like” each other enough to change their relationship status to “Married,” or if they “block” each other’s pages—and lose a lot of investor and business “Friends”—over time.
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