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Tuesday, September 25, 2012

Facebook Shares Went Up after Zuckerberg confession

A week ago Mark Zuckerberg made an announcement, saying that he was unhappy about how the shares in Facebook had slid.

However, he was also upbeat when it came to a few troubles that Facebook was facing. Zuckerberg was especially bullish about how he had a plan to treat mobile technology. Press reports said that Wall Street was actually impressed by Zuckerberg’s performance. As a result, Facebook shares eventually went up. His half-hour talk turned out to add $6.785 billion in market valuation for Facebook, with shares going up to $22 a piece.

Financial experts said that people are starting to feel a little more comfortable. In fact, the industry observers believe that if the founder of the largest social network in the world got out there and talked to people more instead of developing the network, it would be better for the company.

However, the share price was also helped by the company announcing that its nascent advert exchange wasn’t in testing mode anymore. At the same time, a few advertising agencies reported encouraging early results.

Still, the network can’t fix the major problem it faces. First of all, there’s a large number of “locked-uped” shares that belong to Facebook insiders, which will enter the market in the near future. Secondly, there are many people who purchased Facebook shares in the IPO, and they will also be allowed to sell those shares soon enough.

All these factors point to the share price falling during the next half a year to one year. The experts keep forecasting that the price will stabilize at $13 a piece, unless a company can pull out some huge profits rapidly.

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