Facebook (FB) Investors Got What They Deserved
Some Facebook (FB) investors remain angry as Facebook shares continue to trade about 40 percent below last year’s IPO price, But here’s the thing: Many “investors” in the social media company got what they deserved. Here’s why.
At a shareholder meeting this week, some investors asked Facebook CEO Mark Zuckerberg and other executives the following, according to The Wall Street Journal:
Statement 1: A shareholder said he invested “blindly” because his family was a “huge fan” of Mr. Zuckerberg. The investment was for the shareholder’s son’s education.
The VAR Guy’s Response: There’s a difference between “speculators” and “investors.” Let’s not call this Facebook shareholder an investor. Whatever happened to investing based on net income, price to earnings ratio, growth prospects and risk tolerance?
Statement 2: Another investor, who purchased at $35 per share, asked if Facebook was now a bargain at $24 a share. Facebook avoided answering the question.
The VAR Guy’s response: Since when does a technology company make a “buy, sell or hold” statement at a shareholder meeting?
Statement 3: An investor asked if the stock would perform well over the next two years.
The VAR Guy’s response: How do these speculators gain access to shareholder meetings meant for true “investors?”
Technology executives and geeks often blindly chase “shiny objects” in hopes of finding the next big thing. Apparently, some Facebook shareholders did the same exact thing.
For the record The VAR Guy warned investors ahead of the Facebook IPO that the company didn’t look all that attractive.