Investing in Facebook’s IPO?

facebookFacebook has released their IPO at $38 USD per share, where it was possible they could have raised up to $16 billion. Aimed at being one of the largest IPOs in history, they didn’t acheive that goal exactly.  The share value was up to about $45 quickly, but rolled back to close their first day at $38.23 .  They only raised close to $2B, which is respectable, but not a record setter, however they did set a record trading over 460 million shares in the day.

Facebook has over 900 million active users that chat, share photos, discuss hot topics, and display their businesses to the world.  The social media tool is seen as a teenager type fad by many, but it turns out that Facebook is an asset in itself due to its size alone.  Many people registered for an account when they were teens or young adults, but still have it now 8 years later.  As the popularity of the social network grew, so did demographics of who uses it.  Many parents and grandparents have accounts now to keep in touch with their family and friends.  With so many users from a variety of different demographics, businesses have begun taking advantage of the social media network by communicating to the their communities and increasing awareness and sales.  The problem is that there are many who still don’t know how to use Facebook and want to register but are hesitant.  People are able to find a Facebook user guide online to walk them through the sign-up process and all the “how to’s.  This way it will be easy to keep in touch with friends, and family, as well as your community if you have a business page.

But will Facebook remain on top for long?  It looks like, yes, it will.  A number of critics believe that the company has begun their decent, making room for others to take over the number one spot in social networking.  Other critics disagree, saying that Facebook will only widen the gap that currently exists.  Furthermore, even if their growth is slowing down, Facebook currently has an enormous lead on their competitors, so it looks like they’ll stay in the top position for some time to come.  The question is, what will the company do with the IPO funds they have raised?  The next year looks like it will be crucial for Facebook to whether they continue to dominate, or whether they slow enough for others to profit.  What do you think they’ll do with their new capital exactly?

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