Did the Facebook stock go out of style in less than a day?
After an opening day marked first by a delay and then by a dip, Facebook’s IPO ended up at a price of $38.23 by the time trading closed. And things haven’t improved. It peaked at $45 a share Friday afternoon and by today it was trading at around $35. The downturn has the fashion industry in the same boat as all other industries sweating over Facebook’s ability to turn around global markets.
The public offering seems to have hurt other major online retailers. An article in WWD notes that shares of Amazon dropped 2.1 percent, to $213.85 a share, and eBay dropped 1.7 percent, to $38.36 a share.
It’s hard to see how the topsy-turvy first day will impact the company, investors, and the other businesses that rely on Facebook in a variety of ways. It may not matter much at all. What’s more immediate is that the company will have an influx of cash that can be used to develop more advanced interfaces, acquire more competitors, and add more in-house apps
And the fact that the public owns part of Facebook won’t affect the control that Mark Zuckerberg has over the company. In his column in this week’s New Yorker, James Surowiecki explains that though Zuckerberg only owns 18 percent of the total shares, his count for more — the company stock was sold under a dual-class system, with one portion holding much more weight than the other. Zuckerberg’s shares fall into this superior class, so he actually controls 57 percent of the voting shares. Yahtzee!
With all this taken into consideration, how will the dip in value for other online retailers, the bungee-jumping first day for Facebook, and Zuckerberg’s controlling voting power affect the fashion industry? No one can say for sure, but WWD still took it upon itself to consult a few designers on the topic.
“To Mark Zuckerberg: Congratulations, well done!” said Leonard Lauder, chairman emeritus of the Estée Lauder. “Just remember: When looking at all the other people in your space that nothing stays golden forever. Start thinking about tomorrow today.”
Donna Karan was fairly modest.
“He doesn’t need our advice — he should advise us,” she said. “Really, though, there are so many things that need help in this world, and he can help, and help us, make the big changes.”
And Michael Kors felt the need to defend one part of Zuckerberg’s persona that has been critically maligned in some parts of the fashion industry: his fondness for the hoodie.
“Don’t pay attention to fashion naysayers, Mr. Zuckerberg!” the designer said. “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.”