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Facebook on Nasdaq: Will Facebook Experience a Bounce Upon Joining the Nasdaq-100?

Facebook Inc. (FB)Facebook on Nasdaq: Since going public on the Nasdaq in May, Facebook Inc (NASDAQ:FB) has faced its fair share of challenges. Yesterday, it was announced that the social media giant will be added to the Nasdaq-100 Index next week.

According to Nasdaq OMX Group, before the start of trading on Wednesday December 12, Facebook will replace tech consulting firm Infosys Ltd (NASDAQ:INFY).

After selling for $38 a share in May, Facebook’s stock has taken a nosedive, so to speak, with its largest plunge falling as much as 53%. Despite the fact that shares have recovered after strong third-quarter sales, many wonder what the future holds.

Does the Nasdaq-100 Index Guarantee a Bounce?

While there is no way of predicting the future, historical data does not support the idea that being added to the Nasdaq-100 Index is a guarantee of future success. In fact, if historical data proves correct, there is a possibility that joining the NDX could result in a decline for Facebook Inc (NASDAQ:FB).

Earlier today, The Slant took a closer look at a list of 18 Nasdaq-100 additions over the past two years (Kraft excluded). The results were interesting: the majority of these additions have unperformed the market since joining. Before we take a closer look at the biggest flops of the group, let’s check out some of the companies that have actually performed well.

Since joining the Nasdaq-100, Whole Foods Market (NASDAQ:WFM), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and Dollar Tree, Inc. (NASDAQ:DLTR) have made major strides. In fact, Whole Foods and Alexion have outperformed the index four times over. Other companies that have outperformed include:

  • +27%, Avago (AVGO)
  • +19%, Sirius XM (SIRI)
  • +8%, Viacom (VIAB)

Now that we have those six companies out of the way, it is time to come to the harsh realization that 12 of the 18 have failed to beat the market. Some of the worst performers are as follows:

  • -56%, (CTRP)
  • -53%, Netflix (NFLX)
  • -49%, Green Mountain (GMCR)

The past performance of these companies is by no means an indication of how Facebook Inc (NASDAQ:FB) will perform after joining the NDX. However, those expecting a big bounce should strongly consider the historical data detailed above.

Check back here for more updates on Facebook on Nasdaq.

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