Tomorrow is the one-year anniversary for the Facebook (FB) IPO … though many investors might not want to remember it.
Shares are down about 31% in that time, compared to a 19% gain for the Dow Jones Industrial Average and a 22% jump in the S&P 500. That’s right — you would’ve done better plunking your money into humdrum companies like General Electric (GE) or Clorox (CLX).
That isn’t to say Facebook has been a completely lost cause. The company has gotten back on track to some extent, improving its revenues last quarter by 36% thanks to an improved focus on monetizing mobile, which went from nothing to 30% of revenues during the past 12 months.
What are Facebook’s prospects going forward? While a few of us at InvestorPlace have sounded off, I wanted to reach out to a variety of pros in the tech sector to get a different point of view. Here’s what they had to say:
Roman Stanek, Co-Founder and CEO, GoodData
“While Facebook’s IPO fell flat, you have to remember that it’s a marathon, not a race. Facebook has proven that it can stay focused through some rough times and has made big progress in monetizing its huge consumer base through innovations like feed-based ads, app-based ads and personalized ad campaigns. Executing on its mobile strategy and big data will ultimately dictate long-term success.”
Morgan Flager, Partner, Silverton Partners
“My feeling as we approach the anniversary of the ‘botched’ Facebook IPO is that the company’s initial stock price was based more on hype and speculation versus actual results. These lofty investor expectations, combined with a fear of whether or not Facebook would be able to monetize its platform in an increasingly mobile-centric world, made for a rocky first six months. For the most part, Facebook has done a good job with monetization and has made impressive strides in the mobile sector. The tricky part for the company will be continuing to show improved monetization to meet Wall Street’s increasingly high expectations, while not alienating their existing user base by making Facebook too ‘commercial.’ After all, people come to Facebook to keep up with friends and share photos, not to be inundated with ads and other content. This puts them in a more difficult situation than, say, a company like Google (GOOG), which has a service where people expect to see ads.”
Christian MacLean, Co-Founder and CEO, BeauCoo
“It’s been impressive to see the amount of technology that Facebook has managed to deliver in the past 12 months, and that they actually seem to be executing on their plan for mobile. There’s still lots of questions about long term growth and engagement, but they seem to understand the new usage patterns and have successfully adapted to them. I think Facebook Home (despite the fact that it’s been a flop) signals they still have a willingness to experiment with new ways to engage their users, which will be key for their future success in mobile.”
James C. Foster, Founder and CEO, Riskive
“Bullish on Facebook! One year later, Facebook remains one of only a small group of companies that have the capacity to instantly and directly market a new product to over one billion people. Similar to the growing pains experienced by Google in its early years, Facebook is still attempting to mature in certain markets such as mobile. With products such as Facebook Home aiming to be a ‘home run,’ Facebook can afford to continue down its path of innovation-based experiments as opposed to companies that are laser-focused on building scalable revenue models, i.e. Amazon (AMZN). I bought Facebook at the IPO with a two-year plan to hold. Facebook will win with investors by focusing on revenue, and will turn heads with its continued ascent by the end of Q3.”
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
