Stock Trends in the Facebook IPO Age: Social Media Agency Observations

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The Facebook IPO is all anyone is talking about these days, which means that any company loosely associated with the social networking giant stands to see its stock rising in the near future – at least if this week’s performance was any indication.

Many of said associates saw their stocks soar in trading Thursday, including social gaming company Zynga (maker of the incredibly popular Farmville game). According to the S-1 form Facebook filed with the Securities and Exchange Commission on Wednesday, Zynga generates 12% of Facebook’s revenue. Zynga rose 16.84% in trading Thursday, finishing the day at $12.39 per share.

But companies didn’t necessarily need to be affiliated with Facebook in order to see a rise in trading. Facebook’s plan to raise $5 billion, the largest to date, obviously excited investors enough to pour their money into similar web companies. LinkedIn saw a 6.37% increase in share values, and China’s Renrensaw shares rise 8.18%.

Other Internet companies here in the states, such as Groupon, Netflix and Pandora also saw their shares rise in trading Thursday. As Facebook predicted in its own S-1, the revenue generated by Facebook likely encouraged investors to buy stock in other social networking companies in hopes of gaining greater market shares of the next big thing (and there’s always another next big thing).

Some wonder if the Facebook IPO is the point at which the second dot-com bubble threatens to burst. Anything is possible, but this social media agency encourages businesses to approach it the way they would anything else – cautiously and shrewdly, but with enthusiastic optimism. It’s an exciting time to be an Internet-based business!


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