A blog for students of Professor Kagan's Digital Marketing Strategy course to comment and highlight class topics. From the various channels for marketing on the internet, to SaaS and e-commerce business models, anything related to the class is fair game.
Monday, August 06, 2012
Making 500% in profit from Facebook's dropping share price.
This Bloomberg article outlines how some European investors who've bought put warrants on Facebook have made more than 500 percent in profit after the shares dropped 45 percent. The company's July 26 earnings hint that things aren't getting better for the world's biggest social network: margins dropped 50 percent from last year, as expenses surged. Add to this three high profile departures of senior executives. By comparison, Groupon shares are trading at an all-time low of $6.80, 66 percent lower than the company's $20 IPO price, when the company sold shares to the public in November 2011. I wonder how low shares of these publicly traded firms can go -and how much more sustainable these businesses are.
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