Facebook IPO roller coaster and investment

I thought it was time to actually write something down about this, as it is taking proportions that I really would not have predicted : Investing your money in shares is very risky ! If you didn’t know that before you invested, then you were simply reckless and if you did know it, then you do not have a right to complain.

Short term fluctuations in share prices are driven by speculation and not real company results. Facebook didn’t dramatically decrease their revenue over the past few days, nor did it release an amazingly bad feature that scared all of it’s users away. The only reason the share price is going down is because analysts are revising their optimism over the future of the business and their revenue potential.

In the long run, however, the share price will reflect actual results and the performance of the business compared to what people expected of it. If in the long run, Facebook under-delivers, you have a right to complain : they sold you a vision that was either wrong or badly executed. However, for this you have to give them some time : they have no control over the current fluctuations.

I bought a few shares in Facebook myself, simply for the sake of being “in the game”. However, I didn’t invest my life savings or anything I couldn’t lose because I didn’t want to risk it. If you don’t want to risk losing your money, then don’t invest but do not turn around and blame the company for a share price they only partly control.

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