I recently read an article convincing people not to invest in the multimillion industry known as Facebook!
What could possibly go wrong with Facebook?
When looking over its short run stock picture Facebook sunk 45% from its peak when it began to trade.While on the other hand Facebook's current stock price of around $26 make it worthy investment.
Earlier this year, analysts at Bernstein argued that there was a "material risk" to the stock because investors will question Facebook's ability to meet 2013 forecast. Many warnings signs appear to the "Social Network" yet "How can Facebook ever fall?"
It cant hurt to research before investing, so lets look at some warning signs...!
Yahoo.com states that, "Facebook's dual share class is a good recipe for market under-performance.
Facebook's CEO Mark Zuckerberg owns 18 percent of the company, but he
controls 57 percent of its voting shares."As of August 20, 2012 the first lockup period of 172 million Facebook shares will expire. Insiders and employees will be dumping their shares on anyone gullible enough to buy them. All told, around 1.34 billion shares will be eligible for sale. Will you be the buyer?
A poll by Reuters/Ipsos showed that four out of five Facebook users have never bought a product or service from comments or advertisements on the social networker's Website. Put another way, Facebook still hasn't figured out how to turn its 900 million users into an effective platform for its advertisers.Thats what all those big corps. are after, "the big bucks."
Based on all these signs people can make their own opinion and decide if Facebook is worth their hard earned money. We will always make "bad" investments, but many believe Mark Zuckerberg's "baby" will not witstand the test of time. How low will FB shares go? Definitely a
lot lower than any of Wall Street's analysts have predicted.
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