Records have indicated that Facebook Inc. has crashed within the last two years. This has blindsided investors and stock holders who do not expect prices to be too high for the Initial Public Offer (IPO) (Thurm, 2012). Besides this, the crash has created several other problems for the company. It has caused a share lock-up, which when released will lead to dumping of hundreds of millions of its shares on the stock market within the next six months. It is discouraging to the managers to note that Facebook Company cannot do a "follow-on offering" (Thurm, 2012). On the other hand, Facebook annually pays approximately $3 billion related compensation of the company’s employees and might not implement its expansion plans. An appraisal made by the company's human resource department has indicated that it is less inventive than it was before the IPO (Thurm, 2012). As a result, employee retention has become expensive and difficult (Woodburn, 2012).
Facebook Inc. management intends to make its shares eligible throughout the next year. From a realistic point, with Facebook’s stock being far below the current IPO prices, the company will not manage to conduct a secondary stock release to control the offering. In the short run, the company shares, might hit the market in an unsteady stream that might give a supply overhang, which will in turn lower the stock prices. Currently, Facebook tradable shares have a float of approximately 420 million that it sold at the IPO. This translates to approximately 15% of Facebook’s shares (Thurm, 2012).
Another outstanding challenge to Facebook Inc. is an increased number of complaints from its users. Many Facebook users are raising a concern that it is hard to access the site using mobile phones in areas where its monetizing is low (Woodburn, 2012). Other users complain that Google advertisements pop up when searching for something, thus giving them a chance to access the information presented in the pop-up. However, using Facebook pumps information to users when they are busy doing other pertinent issues (Woodburn, 2012).
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