In Silicon Valley, Weighing the Fallout From Facebook

Pedestrians reflected in a window near a display of the share price for Facebook in May.Scott Eells/Bloomberg NewsPedestrians reflected in a window near a display of the share price for Facebook in May.

The debut of Facebook was supposed to be the rising tide to lift all ships, spurring more investments in Silicon Valley at even loftier valuations.

Then Facebook went public on May 18, and those expectations unraveled. Shares of Facebook closed on Monday at $26.90, more than 29 percent below the offering price.

As painful as it must be for Facebook’s new investors, it is also a black eye for Silicon Valley’s start-ups, hoping to raise capital. In the leadup to Facebook’s initial public offering, several start-ups raised tens of millions of dollars at high valuations. Quora, the question-and-answer site founded by a former Facebook executive, Adam D’Angelo, raised $50 million in May at a $400 million valuation — despite a lack of profits.

 

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One thought on “In Silicon Valley, Weighing the Fallout From Facebook

  1. Pingback: Facebook’s ONLY failure: Expectations management • The Register « Ye Olde Soapbox

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