The Facebook (NASDAQ: FB) IPO has clearly been labeled the second worst performing IPO after the lock-up. This is while penny stocks such as NeoMedia Technologies (OTC: NEOM) perform well even though the stock price of these companies has been reduced. Over-the-counter stocks have always been viewed with distrust by investors owing to their volatility. However, recent events pertaining to the Facebook IPO’s dismal failure to hold its own in the market may be changing the minds of investors.
How the Mighty Fall
Facebook released its IPO at a high mark of $38.00 per share, but the stock price tumbled down shortly thereafter. On August 22, 2012, Facebook shares have declined to just $19.31 per share. One of the major reasons that this IPO has suffered such a terrible fate is that most large shareholders such as Morgan Stanley and individual investors like Peter Thiel just dumped their shares. Analysts at Bloomberg are now talking about how low the Facebook share prices may fall and, though they argue that the pricing will not fall below $4.00, it is still a mighty tumble for the social media giant. It is embarrassing to say the least.
A Massive Leap Upward
Of course, analysts agree that Facebook will not turn into a penny stock. Penny stocks like NeoMedia Technologies may be susceptible to “pump and dump” manipulation in the OTC market, but its stock has shown a stunning 100% gain over the last three trading sessions. This makes NeoMedia one of the best performing stocks in the OTC market at this time.
NeoMedia Gains
Unlike Facebook, which has a worldwide reach owing to its prestigious status as a preferred social media platform, NeoMedia uses the mobile Internet to link carriers and consumers, as well as brands, retailers and advertisers by leveraging barcodes. It might have a limited reach but its stock has shown a gain of about 47% in just this last month. This is far from what Facebook can claim right now.
NeoMedia has showcased a 52-week high of $0.06 per share, which was reflected in a significantly higher daily average volume for investors. It is now back to the expected share trade pricing of $0.01 at the opening of today’s trading session, posting an intra-day high of $0.02.
Winds of Change
If Facebook wants to end or at least stump its IPO woes, it will have to come up with innovative ways to entice investors, while at the same time work on slowing down its detractors and any more stock dumping sprees.
On the other hand, NeoMedia has just successfully licensed its mobile barcode patents to Microsoft (NASDAQ: MSFT). Microsoft is a massive tech company with interests in development, manufacturing, licensing and more in the computing world. Its association with NeoMedia will not hurt the latter’s stock pricing one bit.
It has also appointed Mark Lanphear as its new VP of Sales in North America. Lanphear comes with a glowing commendation from ZOMM in Colorado, where he spent more than two decades successfully leading its global sales department. Maybe Facebook also ought to think of letting some heads roll to stabilize its management and show the market that it cares and is willing to make the necessary changes.
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