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Facebook shares will ‘absolutely drop’: Cox
21 May 2012

By Wenlei Ma

After Facebook went public last Friday, its share price will follow the path of AOL and Myspace and see a noticeable decline, according to analyst Peter Cox.
Cox Media principal Peter Cox said despite reports and commentary which decried Facebook’s IPO as a failure because it din’t record a significant gain on the opening price Of US$38, the closing price of $38.23 was still a success.
However, he warned: “The $US38 per share price was totally overpriced in the first place. They floated it at ten times its worth.
“Facebook and Goldman Sachs were able to to sell its shares to a lot of suckers. Over time, the price will absolutely drop and will be worth a fraction of what it is now. It will go the way of AOL and MySpace”.
He said Facebook will be unable to match the growth trajectory Google has seen in its share price, currently trading at $600 from a start of $US85 in 2004. Cox said the market was in the midst of another dotcom bubble, which will inevitably go bust.

Facebook shares will fall further warns economist
30 May, 2012 Alex Hayes

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Facebook shares plummeted to a new low of below $29 last night, with $25bn wiped off the value of the business since it floated less than two weeks ago.

The social media giant’s shares closed at $28.84, over $10 down on their initial float price which valued the company at $104bn.

It has been dogged by allegations vital share information was withheld from investors before the float, and lawsuits have now been launched in the US against the firm.

Peter Cox, the principal of Cox Media, said he expects the stock to continue to fall as the initial valuation was overblown and there are questions over its future viability.

He told B&T: “The market got it completely wrong. People are saying this was a disastrous float, but it was extremely successful as the shares should not have been worth anything like that price.

“They’ve got a long way to go before they get down to what would be a reasonable price.”

But, he said other social media and technology companies should not be put off a public offering by the problems dogging Facebook, as long as they value their business sensibly.


Facebook shares will be cut in half: Analysts
30 May 2012

By David Blight

With Facebook’s share price plummeting to a new low of US$29 overnight after opening less than a fortnight ago at US$42, analysts are saying the price will continue diving to around US$22.

While the stock opened at US$42, higher than the US$38 initial public offering price, the stocks began to nosedive almost immediately, and despite some small reprieves, the company has been on a downwards spiral since its IPO on 18 May.

Facebook’s shares fell another 9.6% overnight to US$28.84. This means about $25 billion has been wiped from Facebook’s US$104 billion float valuation.

Media and stock analysts expect the fall to continue.

Pulse Markets managing director Hamish McCathie said the stocks will continue to dive until they hit around US$22, or the “50% retracement level”.

“The stock was way over-priced,” he said. “There is no clear model on how they will generate money. Sure, there is talk of a smartphone, but that will be a fair way away. In the short term at least, the stock will continue to fall.”

Cox Media principal Peter Cox told AdNews: “The real question is whether in a few years time it will just be a fraction of what it is now. Will it go the way of MySpace and AOL? Also, can they monetise the people on Facebook, and if they can, will it frighten those people away.”


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