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Oh, the mighty has fallen. Since its IPO fiasco on May 18, 2012, Facebook has seen its stock price drop like an anvil. Since that fateful day, the social media stalwart has been rocked by lawsuits surrounding the IPO, defections by executives and, most recently, its stock being dumped by early investors, including--perhaps tellingly--20 million shares sold off by Peter Thiel, one of Facebook's earliest financial backers and a member of its board of directors.
The stock is now hovering at about $20, almost half of its IPO price. But Facebook isn't the only Silicon Valley social darling to fall--Zynga, the social media game maker, is now trading at about $3, down from its IPO price of $10. Not to be outdone, Groupon, the online daily deal site, has seen its stock price slide from $20 on its IPO in November 2011 to about $5 as of Aug. 24, 2012.
THE REAL VALUE
Thus, the stock of some of the biggest social media players has fallen dramatically. What does this do to the value of social media to organizations as a communications tool? Will company executives who control budgets and view stock price as a key indicator of worth sour on social media? Research so far is inconclusive. In the 7/30/12 issue of PR News, we reported that nearly...