Don't Look Now, But Facebook's Stock Is Up 20% In 2 Weeks!
Remember two weeks ago, when Facebook's stock had crashed all the way to ~$25? — Yes, back then, everyone was absolutely certain that it was going to, say, $18, and they were telling everyone who would listen about that.
Context & Ripple Effects
Facebook's rebound comes straight off the trough: by late May the stock had slipped below $29, erasing roughly $35 billion in value from its IPO price, and legions of small-time investors who bought into the debut were sitting on confirmed losses. The two-week, 20% climb back toward $30 lands against a wall of bearish chatter — widely repeated calls for an $18 floor that remain unconfirmed predictions rather than analysis.
The whiplash also fits a longer arc: this same outlet was asking in 2007 who wanted to invest at a $15 billion valuation and got no takers, so skepticism of Facebook's price has a five-year history. What's changed on the fundamentals side during the bounce is concrete — a nearly $60 million Face.com acquisition bringing facial-recognition talent in-house, confirmed work on a location-based mobile-advertising product, and an ad-free athlete portal for the London Olympics.
First-order effects
- Retail investors who bought at the IPO see their losses narrow sharply in two weeks, easing the political pressure on underwriters from the confirmed wave of small-holder losses.
- The unconfirmed $18 bear case loses its momentum as the tape contradicts it, forcing commentators to re-anchor their targets around the ~$25 trough instead.
Second-order effects
- A stabilizing Facebook matters beyond itself because its IPO was cited as part of renewed IPO activity — a visible recovery makes it easier for other companies to price debuts behind it.
- The confirmed location-based mobile-advertising push gives bulls a specific revenue narrative to justify the higher price, shifting the debate from valuation math to product execution.
Third-order effects
- If the pattern holds, tech IPOs get repriced through exactly this kind of violent post-debut discovery — hype sets the offer price, public trading resets it within weeks — which pressures bankers to discount offerings more conservatively.
- The episode hardens the lesson that retail enthusiasm at debut is a poor guide to fair value, pushing the structural question of whether consumer-internet companies should list smaller and let the market climb.
The trend: Social-media debuts are entering a phase where public-market trading, not banker pricing, determines what these companies are worth — with Facebook's post-IPO swing as the defining test case.