Facebook, Inc. (FB) has had a rough time of things. Since its IPO in May, the company has ranged in price from $25.52 to $45.00 a share, and averaged well below its initial offering of $38.00 a share – a reality that spurred investigations from NASDAQ, the exchange hosting Facebook’s stock, to the SEC on the idea that the offering highlighted dangerous flaws in US securities laws.
Facebook’s IPO was arguably a disaster. That high of $45 was hit the first day, with shares falling back to $38 before the close of trading. The next day, Facebook hit a high of just $36.66 and declined to $33 a share. Since then, the stock has gone as low as $25.52 and barely above $33, with most of that rally coming from recently. Over the past two weeks, Facebook has soared from $26.84 on June 11 to $33.02, its highest level today, June 24.
These factors have led some critics to say that Facebook and other social media stocks like it are overpriced – and that may be true, at least with regard to Facebook’s initial offering price given the stock’s recent performance – but Facebook’s business model cannot be so easily dismissed. Collecting vast amounts of data and monetizing it has a myriad of uses, from allowing businesses to reach precise demographics to providing behind the scenes market research at the click of a button.
And, Facebook is rapidly moving to address its issues. The company recently introduced several new features. It now allows Facebook users to find friends nearby. There is also an app called Facebook Messenger that allows users to instant message friends using their Facebook accounts, providing access to a social network no matter how the friend is connected (be it through mobile date or wireless). Further, to facilitate the latter, Facebook made a change so that all users have their Facebook emails listed on their profiles, bumping other emails provided.
Now, Facebook is focusing on building its corporate image. According to the Wall Street Journal, “In February, California State Teacher’s Retirement System’s Director of Corporate Governance wrote a letter to Mr. Zuckerberg saying, ‘We are disappointed that Facebook’s board will not have any women.’” And, they weren’t the only ones. The company drew a fair amount of fire from corporate governance groups for not having a woman on its board. Today, Facebook took a move to change all that, naming Sheryl Sandberg, the Chief Operating Officer, to the company’s board.
A former Google (GOOG) exec, Sandberg has been with the company since 2008. She also currently serves on a number of boards, including that of Disney (DIS). “Her understanding of our mission and long-term opportunity, and her experience both at Facebook and on public company boards makes her a natural fit for our board,” said Zuckerberg. Facebook’s board currently includes Zuckerberg, venture capitalists Marc Andreessen, Peter Thiel and Jim Breyer, Washington Post Co. CEO Donald Graham, Netflix Inc. CEO Reed Hastings, and former White House Chief of Staff Erskine Bowles.
