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How Facebook Could Save Its Stock Price and Reputation As a Solid Business Model

June 01, 2012 | Comments: 0 | Views: 186

Well, many say that Facebook's IPO was a complete disaster, as the stock went down 24% in less than a week, but then went back up again a dollar a share that following week off the bottom, and it makes us all wonder if this is the bottom, and if Facebook will stabilize itself in the market as per its stock price, or if it will continue to trickle down in the future. It turns out that many American teenagers have lost interest Facebook, perhaps because Facebook has not been innovative enough, quick enough, or able to stay ahead of the; "oh, that was 30 seconds ago," reality of the average ADHD teenager.

Nevertheless, Facebook will need to save face in the stock market, or it won't be considered cool, popular, or successful, therefore its participants, especially those in the United States which want to belong to something that is cool, unique, and a winner will migrate to other online activities. Indeed, I do believe there is a way for Facebook to save face, save its stock price and reputation, and later promote itself as a solid business model as the advertisers find value in what it has to offer. Now then, before I go too much further a little FYI: I do not have a Facebook page, I do not own stock in Facebook, and often I wonder what the point of it all is anyway.

Okay so, with that FYI out of the way, here would be a strategy that I would employ to save Facebook's reputation, and stabilize its stock price. The Zuck, as Wall Street is now calling him, that is the CEO of Facebook, Mark ZuckerBerg needs to come back from his honeymoon, and tell the world that Facebook is not about Wall Street it's about people, it's about their users, not about the stock price, and that the reason it went public was so it could get the money it needs to do the upgrades to make it the greatest social networking platform the world has ever seen.

In doing this, The Zuck will show that he believes in power of the people, and the power of what he has created. He would show that he believes in the users, and cares about their best interest, and only cares about the money enough to grow the company to make it and keep it great. At that point the users will slowly trickle in to buy shares of stock, which will hold the price up, and allow it to continually climb. Still, it has to reach bottom, and right now some analysts are saying that a fair price based on its multiple of earnings is somewhere around $13.80.

No, that's not a very good place to start, $38 per share was a much better price, but that's all history now, and the CEO has to keep investors happy now and work with what he's got, because he has to keep Facebook; Hot!

Lance Winslow has launched a new provocative series of eBooks on Stock Picking Concepts. Lance Winslow is a retired Founder of a Nationwide Franchise Chain, and now runs the Online Think Tank; http://www.worldthinktank.net

Source: EzineArticles
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