Using the Internet or Academic databases, research Facebook’s Initial Public Offering (IPO) and subsequent financial performance. Based on your research:
Write a six (6) page paper in which you:
- Evaluate the valuation and method used to determine the Initial Public Offering value of Facebook stock, indicating any miscalculations in the valuation that may have mislead potential investors and how these errors may have been minimized. Provide support for your response.
- Assess the performance of the stock within the first year of the public offering, indicating the drivers of the performance and the resulting impact to the company performance.
- Suggest an alternative method of valuation for the company valuation indicated and how it may have yielded a different value and the potential resulting impact to investor decision. Provide support for your rationale.
- Assess the role of the Chief Executive Officer in relationship to the stock performance, suggesting what the person in that role may have done differently to positively influence the performance of the stock and value to investors. Provide support for your suggestions.
- Evaluate the risk / reward position to an investor when purchasing stock during an initial public offering, indicating under what circumstances you would advise an investor to do so.
- Predict the stock price of Facebook over the next five years, indicating the key drivers of the performance and the resulting impact to the stock price. Provide support for your prediction.