{"id":29762,"date":"2012-05-21T16:03:30","date_gmt":"2012-05-21T20:03:30","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/05\/a-few-more-reasons-to-avoid-the-facebook-nasdaq-fb-ipo\/"},"modified":"2012-05-21T16:03:30","modified_gmt":"2012-05-21T20:03:30","slug":"a-few-more-reasons-to-avoid-the-facebook-nasdaq-fb-ipo","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/05\/21\/a-few-more-reasons-to-avoid-the-facebook-nasdaq-fb-ipo\/","title":{"rendered":"A Few More Reasons to Avoid the Facebook (Nasdaq: FB) IPO"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"A<\/p>\n

Like it or not, Facebook has to prove profitable and sustainable, two issues that are still in question at this time.<\/p>\n<\/div>\n

On Tuesday, May 15, Investment U<\/em> research contributor Gary Spivak asked a series of questions about Facebook:<\/p>\n

\u201cCan an entire industry or company that has been in existence for less than 10 years continue to grow at its current torrid pace? Will social media continue to stay \u201chot hot hot\u201d or will it merge into the mainstream? If it takes a company seven years to \u201crule the world,\u201d how long could it take a competitor to come in and simply be cooler or just plain better?\u201d<\/em><\/p>\n

Those are questions that many market analysts have been asking ever since Facebook<\/strong> (Nasdaq: FB) first announced its IPO back in February. And they have every right to ask them, too.<\/p>\n

The social media site arguably has the most hyped-up IPO of the century and, according to some business writers, of all time. What\u2019s even less disputable is that investors were salivating over the mere prospects of Facebook going public long before any such thing was declared.<\/p>\n

But initial publicity and enthusiasm can only go so far. At some point, a company has to stand on its own merit.<\/p>\n

Like it or not, Facebook has to prove profitable and sustainable, two issues that are still in question at this time.<\/p>\n

General Motors Backs out of Facebook Advertisements<\/h2>\n

With mere days left until the big IPO, Facebook bulls recently received a piece of unexpected news to pause over. Apparently, General Motors<\/strong> (NYSE: GM) sees some issue with its advertising campaign on the site, and has pulled its $10 million out of the game.<\/p>\n

Now, that could be for a large variety of reasons. And none of them are clear considering the car company\u2019s refusal to address speculation and Facebook\u2019s inability to do so, since it\u2019s in its pre-IPO \u201cblackout\u201d period.<\/p>\n

But it isn\u2019t the only piece of bad news the social media giant had to deal with in the last few weeks. Back in late April, Facebook reported first quarter financials, which included a decrease in profits amounting to $28 million less than the previous year and a 6% decrease compared to the last quarter.<\/p>\n

MarketWatch<\/em> tech columnist John Shinal explains that \u201cFacebook\u2019s results over the last two years show a consistent pattern: Advertising revenue surges in the second and fourth quarters, respectively, yet slows or even weakens in the first and third calendar periods.\u201d<\/p>\n

Yet even so, it doesn\u2019t change the fact that this was the first time profits dropped in at least a two-year time span.<\/p>\n

Consumers Ok With Facebook Alternative in the Future<\/h2>\n

Again, one bad quarter doesn\u2019t a trend make, but it\u2019s slightly worrisome. So too, for that matter, is a recent Associated Press-MSNBC<\/em> poll.<\/p>\n

Apparently, despite the hoopla in the business world and even the obsession among consumers themselves, half of Americans think that Facebook won\u2019t be sticking around for the long haul. About the same number also believe that the social network isn\u2019t worth what CEO Mark Zuckerberg expects it to go for.<\/p>\n

That cynicism shouldn\u2019t be shrugged off lightly, either. In the ever-evolving world of technology, trends come and go extremely easily. For one example, take the evolution of musical recordings over the last few decades\u2026<\/p>\n

Just 30 years ago, records were still being made and sold. Yet since then, the market has seen cassette tapes come and go, CDs begin their slow but obvious death spiral, and MP3 take over the market.<\/p>\n

Few people can say exactly what\u2019s going to come next, only that something undoubtedly will\u2026 and probably sooner than later.<\/p>\n

The same has been true of social media\u2019s relatively short history. In 2003, the hip crowd was gaga over Xanga, an online journal site where people could share their thoughts and pictures with friends or their larger community. Next up was MySpace, which peaked in 2006.<\/p>\n

And while Facebook has reigned king \u2013 with Twitter possibly as queen \u2013 for the last several years, who\u2019s to say that will last?<\/p>\n

Facebook might be able to beat the trend like its predecessors haven\u2019t been able to\u2026 but it\u2019s probably wisest to say otherwise all the same.<\/p>\n

Good Investing,<\/p>\n

Jeanette Di Louie<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U Like it or not, Facebook has to prove profitable and sustainable, two issues that are still in question at this time. On Tuesday, May 15, Investment U research contributor Gary Spivak asked a series of questions about Facebook: \u201cCan an entire industry or company that has been in existence for less … <\/p>\n

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