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The aim of the Fiasco Awards is rewarding the best projects in the ICT field that have ended up as a FIASCO. We want to promote a critical spirit, a positive attitude towards the obstacles in the road to success, and why not? let's admit it: to have fun. More »
Don't be afraid (D'on ve el fred? - ¿Dónde vive Alfredo?)
Finalist Fiascos
The Facebook IPO

The Facebook IPO

The history
A group of students from Harvard University founded Facebook in 2004. Eight years later made the company public.
Most stock advisors and press prized the company the days before IPO departure and investors rushed to buy.
The day of the IPO, valuation was USD 104,000 million. But within hours the underwriters had to buy shares massively to stop the collapse.
Facebook is a company with benefits, but the multiplier applied to relate benefits and value is twice the one applied to Apple or Google.

The fiasco
Facebook is a very successful project, 900 million customers attest it. But its IPO was a big fiasco.
A year before, Goldman Sachs valued the company in half. 15 days before the IPO, the underwriting banks valued the company 17% below the price at which it was finally issued.
The share price fell 50% in late August 2012. As of today it is still 20% below the issuing price.
The IPO of other tech companies like Twitter has been delayed due to the failure of Facebook.

What can we learn?
In the stock exchange there are people who always win. The same banks that overestimated Facebook stock made · 150 million in commissions.
A successful project such as Facebook is a good investment only if the price is right. The greed of sellers and brokers always requires the ingenuity of buyers.
Analyzing an IPO months later is easy, you always guess right.

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