Facebook IPO fails to live up to hype

For all the hype surrounding the IPO of social network Facebook, its first day as a public company was rather tepid. The company's stock rose only a few pennies in its IP with shares closing at $38.23, barely above the $38 IPO price.

The performance came nowhere near the expectations of Wall Street and Silicon Valley, and cast doubts over whether the stock  would be the sure bet it had been touted to be.

According to some analysts, there was great pressure, hype and attention with all eyes on Facebook, but it ultimately turned out to be a damp squib.

Among the reasons analysts ascribe for the lacklustre interest are its valuation at about 100 times earnings, which are regarded as being too high. In addition, the growth in new users was slowing, and Facebook has not yet found a way to leverage mobile devices, where social media was heading.

The decision, this week to stop advertising on Facebook after it said it failed to deliver results,  heightened concerns about how Facebook could profit from its 900 million users.

However, possibly the biggest blunders came in recently as the company and its largest shareholders moved to maximise their profits at the expense of new investors.