I think we all know the much
over hyped Facebook floating a few months ago is a flop. Shares peaked at $38 on the day but now hover at almost half that value.
Spare a thought for the guys from Instagram, who have seen the value of the buy-out by Facebook slump too.
When Facebook agreed to buy Instagram, the photo sharing app, they struck a deal valuing the sale at $1bn. Later it became clear that this was made of $300m in cash and the rest in Facebook shares. At its peak the balance of shares would have added $200m to the fund, valuing Instagram at $1.2bn. However, back in the real world (today) the poorly performing Facebook shares now value Instagram at around $735m.
The deal is still awaiting final clearance from US regulators and I am sure Instagram wish it to settle soon before the shares fall even lower!