This is about the issues involving the Facebook IPO compared to the Bernie Madoff incident.
Recently Facebook’s IPO launched and has turned into a huge mess with its overpriced IPO price and the rapid dropped that followed. This Facebook IPO created a huge debate around things such as: what value does Facebook actually have, and all the money lost by initial investors.
First off, the Facebook IPO was questioned by many. What does Facebook really have? They don’t sell any product: digital or physical , and Facebook is a social thing. These types of things can come and go. One moment or even for a while it can be hot; however, in a year or two Facebook could be fading to the background. All Facebook is offering in the IPO is money they get from people’s information and ads from companies. What happens when companies drop out?
This greed is comparable to the Bernie Madoff incident. Madoff promised impossible growth through investment and turned out to be a ponzi scheme. He cheated 18 billion dollars out of people and this money hasn’t been accounted for. The Facebook IPO shows this same greed. Facebook could be gone in the blink of an eye and now they used its popularity and the public’s love for Facebook to cash in and secure their futures.
Even worse in this case, the Facebook IPO was vastly overpriced and this caused chaos and the price soon to a nosedive. The price was originally around 30 dollars a share; by the end of the third day the price had dropped to a measly 7 dollars. Think about the money investors lost. This was caused mainly because of Facebook execs greed and also Zuckerberg’s lack of interest. Zuckerberg didn’t show up for many investor meetings and really didn’t help push and generate interest in the IPO. He has made his money and now it is the Facebook execs turn to make their cash.
This is almost a scam, but the Bernie Madoff plan was worse and at this moment only speculation is out there that Facebook tanked their IPO to make their money and go. Now , it will be interesting to see what happens when their profits and quarterly revenue are released and the real value of Facebook is shown.