Tuesday, July 17, 2012
Is Facebook Dying?
After rallying from $25 back to $32, FB stock has taken a beating in the past two days and is now back at $28 per share. While the stock movement is troublesome for owners, a trend that may be even more troubling is that in spite of a p/e multiple of 85x, FB's underlying business may be shrinking, not growing. Below is a chart pulled from Alexa.com which shows that the average amount of time that a user spends on Facebook is declining rather rapidly. Whereas in 2011 the average user spent over 30 minutes per day on facebook's site, over the last 7 days that figure has dropped below 20. Hopefully for Mark Zuckerberg, that extra time is being spent on Instagram.