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Facebook E-commerce move: Is It Merely a Desperate Step to Revive Its Beaten up Stock?
After the shocking disappointments of the botched Facebook (NYSE:FB) IPO, and the dramatic events that saw investors filing suit against the social network company, it seem pretty much that the executives at the company will have nothing else to focus on than to look for innovative ways to bring back the share price to its past levels, or even higher.
Currently wasting away far below its initial offering price that was set at $45, but still with its priciest asset of more than 840 million active subscribers, the company has again looked inwards by bringing out the Facebook E-commerce application that will allow users to buy real goods instead of the usual virtual goods.
The e-commerce tool has been designed to make it easier for consumers to spend their money – with this; users can make their payment immediately or add payment details later. Facebook suggests gifts for friends next to birthday reminders or timelines.
Facebook which has traditionally relied on the huge revenues it garners from advertising is now being forced to attract more investors with its expanded revenue base. Interestingly, market watchers have pointed out that Facebook’s non ad-based revenue will be an important component that will increase revenue by facilitating payments from web and mobile, and eventually revamp its long slumping share price.
Apart from the expanded revenue from mobile phone users, Facebook will also have the opportunity to re-instill confidence in investors who are increasingly getting estranged from the company’s strategic and business approach, an issue that contributed to the court action against the social network giant.
If there is anything utterly positive in the new strategic approach of Facebook, especially in terms of investment and stock market opportunities, it will be the fact that Facebook is being re-packaged as a company for the future – a company that favors a long term hold, instead of the short term play that burnt the fingers of the company’s recent IPO investors.
Ultimately, while this crucial Facebook move may seem like a hurriedly packed model to mollify investors and eventually revamp share price, analyst have pointed out that there is a real opportunity for a bounce back in the shares of the company, and patient investors or investors after the IPO will eventually see their portfolio rise impressively.
Despite the seeming positivity that surrounds the social network giant, other analysts have suggested that the company’s strategy has many questions than answers. Many have questioned the feasibility of users dumping the likes of Amazon for Facebook, and others seem to have been merely disturbed by the “non-corporate”, “non-executive” appearance of the company’s CEO, Mark Zuckerberg.
All of these points to the fact that not too many investors are willing to join on the bandwagon – just yet.
