NEW YORK — Rather than igniting a new market boom, Facebook Inc.’s much-touted initial public offering fizzled Friday, leaving investors right where they were before the hubbub — mired in worries over Europe’s economy and political morass.
This story first appeared in the May 21, 2012 issue of WWD. Subscribe Today.
Shares of the social media company closed up just 23 cents to $38.23 — having risen to as high as $45 in midday trading. That gives the company a market capitalization of $105.63 billion. There were hopes that a rising Facebook would help other new economy companies, but shares of Amazon.com Inc. fell 2.1 percent to $213.85 and eBay Inc. sank 1.7 percent to $38.36.
The S&P Retail Index declined 0.6 percent, or 3.58 points, to 590.78 as the Dow Jones Industrial Average declined 0.6 percent, or 73.11 points, to 12,369.38. European markets also declined, with London’s FTSE 100 leading the way down with a drop of 1.3 percent to 5,267.62
Running countertrend were three companies that weighed in with first-quarter results. Shares of Pacific Sunwear of California Inc. gained 9.3 percent to $1.29 after its losses narrowed; Aéropostale Inc. rose 4.4 percent to $18.49 despite a 34.5 percent profit drop, and Ann Inc. rose 3.2 percent to $26.68 after topping analyst earnings expectations.
For Facebook chief executive officer Mark Zuckerberg, the IPO might well be an “out of the frying pan and into the fire” moment. The intense buildup to the offering is over, but the scrutiny and second guessing that all public companies enjoy is just beginning. A few fashion industry titans weighed in with some advice on how Zuckerberg might handle all the new attention.
“To Mark Zuckerberg: Congratulations, well done!” said Leonard Lauder, chairman emeritus of the Estée Lauder Cos. Inc. “Just remember: When looking at all the other people in your space that nothing stays golden forever. Start thinking about tomorrow today.”
Michael Kors added, “Don’t pay attention to fashion naysayers, Mr. Zuckerberg! I wore black crewnecks, black jackets and jeans before my IPO and I continue to do so after. It’s your talent, vision and performance that people are interested in.”
Donna Karan had a slightly different take: “He doesn’t need our advice — he should advise us. Really, though, there are so many things that need help in this world, and he can help, and help us, make the big changes.”