Facebookers Now Allowed to Talk About Falling Stock Price
Back in the days when Facebook was a private company that everyone was just chomping at the bit to see go public, CEO Mark Zuckerberg was acting as if going public wasn’t such a good thing and that his company’s focus should be on its users. He exhibited a near disdain around the idea of stockholders and running a company based on their needs. Back in May USA Today reported
For Michael Pachter, analyst at Wedbush Securities, Zuckerberg’s attitude and attire symbolizes “a level of aloofness to stakeholders.”
“He seems very customer focused and very employee focused. I am not sure he cares about anyone else. … If he’s going to go public, he has to answer to shareholders,” Pachter says. “That’s why Google hired Eric Schmidt. That’s why Steve Jobs was ultimately forced out of Apple.”
Based on what has happened to Facebook’s stock recently, now we know why Zuckerberg felt like he did. After closing at an all time low of $19.87 per share yesterday (with a slight pre-market uptick before today’s trading begins) it has been made public by the Wall Street Journal that Zuckerberg is attempting to pump up morale at the company. He is trying this not by clamping down and focusing like he urged back during the IPO with a post on hos wall to “Stay focused, keep shipping” but rather to admit that this is not easy.
Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be “painful” to watch as investors continue to retreat from Facebook’s stock, according to people familiar with the meeting.
Based on this timeline the morale was bad even BEFORE yesterday’s low was hit. I wonder what it’s like today?
So what does this mean for Facebook? It’s still far to early to tell. If you want to see an interesting stock history of a company that is doing pretty well these days despite stock ups and downs, take a look at the lifetime chart for Amazon. There were some dark days there and at least one current Facebooker lived through it.
Facebook’s vice president of partnerships, Dan Rose, earlier this month at the company meeting told employees he knows the company can’t pretend that people won’t worry about the stock price, according to these people.
Mr. Rose recounted a story about when he was at Amazon.com Inc. AMZN +1.71% and the stock price tanked, these people said.
He said he had young children and was concerned about his ability to provide for them, but he asked himself, “Do we have the right people in place and is our mission worthwhile?”
Mr. Rose said he asked himself the same questions about Facebook and believes the answer to both questions is yes.
Of course, he has to say something like this. If anyone shares a Chicken Little ‘the sky is falling!’ attitude at a company meeting run by the CEO it’s not likely they make it to the end of their talk. Still, it is probably WAY too early to say anything that points to Facebook’s demise. But should we be overly optimistic either?
While I am admittedly not a fan of Mark Zuckerberg he seems to be doing an admirable job in a tough circumstance. The trouble is that ‘admirable jobs’ and ‘fighting the good fight’ platitudes don’t satisfy investors. And, let’s face it, Facebook is no Amazon. Facebook is trying to create revenue streams that are ad based and under a lot of scrutiny while Amazon was selling everyone else’s stuff that people already needed and wanted. The question becomes ultimately whether Facebook is indeed a sustainable model.
If this statement is any indication, we won’t know until Facebook rolls out whatever it is they have cooking out in Menlo Park.
Mr. Zuckerberg went on to tell employees that the press doesn’t know the company’s future plans, and if they did, they would have the same faith in Facebook’s ability to fulfill its lofty stock-market valuation. He said that investments the company has made over the last six to 12 months will soon bear fruit, the people said.
Those future plans better be pretty spectacular or else there could be many dislikes for Facebook.
What’s your take?