{"id":17008,"date":"2012-05-31T17:43:01","date_gmt":"2012-05-31T17:43:01","guid":{"rendered":"https:\/\/biznews.fiu.edu\/?p=17008"},"modified":"2017-06-29T16:52:32","modified_gmt":"2017-06-29T20:52:32","slug":"faculty-member-forecasts-facebook-filing-at-panel-discussion","status":"publish","type":"post","link":"https:\/\/biznews.fiu.edu\/2012\/05\/faculty-member-forecasts-facebook-filing-at-panel-discussion\/","title":{"rendered":"FIU Business faculty member forecasts Facebook filing at panel discussion."},"content":{"rendered":"

Helen Simon had a hunch about Facebook.<\/p>\n

In her research for a faculty panel held at Florida International University\u2019s (FIU) College of Business Administration, she saw too many signs of hype around the initial public offering (IPO) of the popular social networking site.<\/p>\n

\u201cI had a sixth sense that if Facebook flew, it would fly for one day and adjust down to a rational level,\u201d said Simon, a finance faculty member and certified financial planner. She shared her research at the panel presented by FIU Media Relations on May 8th, 10 days prior to Facebook\u2019s debut as a public company.<\/p>\n

\"Helen
Helen Simon<\/figcaption><\/figure>\n

Her comments were part of a freewheeling discussion on how Facebook\u2019s new status as a public company would evolve in the legal, cultural and economic worlds. Also present were Bogdan Carbunar, College of Engineering and Computing; Rosanna Fiske, School of Journalism and Mass Communication (SJMC); Raul Reis, dean of SJMC; and Hannibal Travis, College of Law. Jane Wooldridge, moderated the discussion. Over 100 members of the media and other participants heard the discussion, participating both at FIU and online from as far away as Germany.<\/p>\n

Bottom line research yields the right results. <\/em><\/p>\n

Simon enlisted three interns from the State Farm Financial Literacy Lab—Justin Garcia (BBA \u201912), Charles Stack (BBA \u201911) and Christine Montero (BA \u201912)—to analyze Facebook\u2019s EDGAR filings and share their thoughts as young Facebook users. Under Simon\u2019s guidance, Garcia performed a discounted cash flow valuation and came up with a price of $30 a share.<\/p>\n

Citing these findings, Simon cautioned attendees not to overpay for the stock if it rose too high on its opening day. She had witnessed a similar pattern in the recent IPO of Groupon, the couponing site, which soared on initial excitement and then plummeted with news of weak financials.<\/p>\n

\"Jane
Jane Wooldridge, business editor of The Miami Herald, moderated the discussion.<\/figcaption><\/figure>\n

\u201cThat\u2019s what most of them do,\u201d she said.<\/p>\n

On May 18th<\/sup>, Facebook went public at $38 a share, traded as high as $45, and quickly fell to the low 30s by the next day. During the week after Memorial Day, it traded below $30 a share. The languid performance of the stock and potential legal issues surrounding what was and wasn\u2019t revealed by underwriters have made Facebook one of the most controversial public offerings in years.<\/p>\n

Online and in the media, Simon and other panel members continue their conversation about Facebook and its future.<\/p>\n

\u201cIf there\u2019s some catalyst that makes the earnings per share go up, then the stock price should go up,\u201d Simon said. \u201cYou have to go back to the basics.\u201d<\/p>\n