Facebook has a real problem on its hands lately. Following its May 18th IPO, Facebook’s stock price has dropped 23 percent. Morgan Stanley, Facebook’s lead investment bank for handling the IPO, is also being struck by allegations of insider trading and withholding valuable information. To make matters worse, the trading platform for the Nasdaq exchange failed to keep up with the volume of trading on Facebook and crashed, leading many investors to make erroneous trades. All this has combined to create a class-action lawsuit against Facebook, and a storm of media criticism has emerged.
Mark Zuckerberg, Facebook’s CEO, also made the odd decision to draw the spotlight on himself by arranging to have his marriage a day after the IPO. His nuptials only drew more attention to his controversial character and leadership as his company struggled on Wall Street. Now the Washington Post asks Would the Facebook IPO have bombed if Mark Zuckerberg had an MBA? This is a difficult time for Facebook, and many of its moves are being heavily scrutinized. Zuckerberg should probably refrain from popping up on our computer screens and instead go back to Facebook HQ and work to mitigate this media fallout.
So now the question becomes, what would help? Rolling out more mobile innovations for the Facebook platform would do a great deal to restore investor confidence and improve Facebook’s reputation. Until more concrete improvements can be made to Facebook’s revenue generating model, then the company should lay low and continue to work on ways to take advantage of its absolutely humongous user base. Now is not the time for grand pronouncements and big promises, Zuckerberg should simply let the numbers do the talking.
