1. Social Networking in
the Business world
By German Ramirez, Cliff Danskine,
Min Latt, Luis Alcantar
2. IPO
❖ Initial public offering, the first day a company is sold
to the public during a securities exchange
❖ The modern tech giants as Facebook and Twitter are
drawing interest to investors
❖ Although both companies have been valuated high,
their performance in the stock market has not yet
shown its true potential.
3. Facebook IPO
❖ Facebook being the biggest social networking company
in the world offered a potential opportunity for
investors at its IPO
❖ Speculation made the stock very volatile.
❖ Facebook at its IPO was set at $38 per share, the stock
hovered in its first trading day.
❖ The stock closed at 26.81 after it’s first week, showing
a dramatic 30% loss in the first week.
4. Stock Performance
➔ žFacebook on opening day had a slight increase in the
stock value
➔ žThis attraction for investors was quickly lost, the stock
trailed to around $20 per share.
➔ žFacebook was able to fix this flaw by increasing their
mobile advertising.
6. David Ebersman
● Responsible for the IPO Debacle
● Raised share price to $38 when original decision was
$28-$35
● Also pushed market share 25% more than planned
● Doesn’t consider much about after effects, also under
influence from greedy financial firms and advisors
7. Facebook back in action
● Through mobile ad, revenue 70%
● Facebook mobile responsible for 41%
revenue of the company
● As of 31 June, share price is back to $38
8. What they should not have done
● Ebersman should not have bit off more than
he could chew
● Should not have listened to short term
money making advisors
● Should not have overestimated share
demand
9. Facebook Vs Twitter
● Facebook has 1.15 billion active users
● Twitter has 200 million active users
● Both use advertising as their major
source of income
● Both interest people who aren’t
traditional investment
10. Stakeholders
● Employees at Twitter
● Selling agency of Twitter: Goldman Sachs
● Buyers of the IPO
● The users of Twitter
● The community
11. The Consequentialist Theory
Best decision yields greatest net benefits to
society not just yourself
● Low IPO price
● Sell a small percentage of ownership
● Open and honest about company’s
standings to the future buyers of its IPO
12. The Deontological Theory
Focus on doing what’s right
● Doing what was right would be disclose
all information to the future buyers of
the IPO
13. Twitter’s IPO
● Twitter stated they had lost 79.4 million
last year and that they had never
recorded a profit in the last 3 years
● It sold only 20% of the total equity
● The IPO price was low at $26 per share
● Quickly went up to $45.10 (73% above)
that day
14. Twitter's Success
● Advertisement
● Reach towards investors
● Simple use
● Success on mobile
