Now that the fervor over Facebook’s stock IPO (initial public offering) has finally died down, let me assert that they nailed their stock price. The fact that people are being critical over it, suggests only one thing: greedy speculators.
If an IPO price offered is too high, the shares do not all sell (and the company doesn’t raise as many funds as they wanted). If they do manage to sell all the shares and the stock price plummets, then everyone feels they paid too much and were ripped off.
On the other hand, if the price offered is too low, then the stock quickly sells out and the price jumps up, sometimes quite a bit. But when this happens, the company doesn’t benefit from the higher price—they merely get the amount they planned on—but the stock speculators make out like bandits. Many expected Facebook shares to do just that, sell out quickly and then skyrocket. When that didn’t happen, the speculators missed the quick profit they wished for—and began complaining. This merely exposed their greed and the expectation of making a quick buck without really doing anything.
The fact that Facebook’s stock sold quickly and they hovered around the offered price, confirms it was neither too low nor too high, but just right. This was the right thing for Facebook and all its existing stockholders. Facebook earned all the money they expected to but didn’t leave anything on the table for greedy investors trying to make a quick buck.
Peter Lyle DeHaan, PhD, is an author, blogger, and publisher with over 30 years of writing and publishing experience. Check out his book The Successful Author for insider tips and insights.