The pop that wasn’t: Life after Facebook’s IPO

continued from page 2

Question of the Day

What has been the biggest debacle on Obama's watch?

View results

“We know a lot more about what’s going to happen with the Internet,” he says. “Back then it was…like digging for oil. We didn’t know what was going to happen.”

Now, companies that are already profitable are going public. Yet they are not seeing the eye-popping stock price increases once they begin trading. The biggest one of them all, Facebook, the one with 900 million active users, with $3.7 billion in revenue and $1 billion in net income last year, certainly didn’t.

“The No. 1 piece of evidence against a bubble mentality is what happened with Facebook,” Sabnani says. “The fact that Facebook is a soft IPO shows how much more rational the market is now.”

Duncan Davidson, managing director at VC firm Bullpen Capital agrees. The Internet bubble of the 1990s saw a lot of big IPOs burst because “there were crappy companies going out.”

Facebook is not a crappy company. This is just a blip in the poorly handled offering,” he says.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

blog comments powered by Disqus
TWT Video Picks