Kenneth Wisnefski Announces Facebook’s Diminishing Stock Value and the Social Media Outlook for 2012

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WebiMax founder and CEO Kenneth Wisnefski, visited with Bloomberg network to discuss the value of the social media sector for the remainder of 2012 and announced Facebook’s diminishing stock value.

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With Facebook being so dependent on advertising revenue, the company needs to determine a way to generate revenue from their mobile application.

WebiMax founder and CEO Kenneth Wisnefski, visited with Bloomberg network to discuss the value of the social media sector for the remainder of 2012 and announced Facebook’s diminishing stock value.

Shares of Facebook fell more than six percent at the market close during yesterday’s trading session as the first of multiple lockup periods came to an end. While trading volume surged 500 percent above the daily average, this was the first time that certain company insiders were permitted to sell their holdings in the social media titan.

“What we saw yesterday is a massive sell-off in the early trading session, where Facebook fell more than five percent just within the first hour,” stated Wisnefski. “While the selloff may have been sparked by investors expecting insiders to release their holdings, the fact that trading value was so high does hint at the fact that some Facebook executives could have executed their right to release some of their shares.”

Typically with a lockup, early investors and venture capitalists will release some of their holdings for profit-taking, however with Facebook, it could be a sign that those at the very top have their doubts as to Facebook’s present and future value. In fact, some may try to gain liquidity on their initial investment, while others may be holding the stock with the intent it has a much more lucrative future value.

“Based on the sheer volume of users on Facebook itself, the company is not a bad investment or a bad choice,” states Wisnefski. “The company needs to determine how to make the most profit and revenue, of which, 85 percent stems from advertising.”

Facebook announced during their Q2 earnings that the company has over 900 million active users and users spent 391 minutes a month on the site. What’s more is the fact that the average user spends 441 minutes per month on Facebook mobile. Wisnefski made the argument that Facebook needs to monetize their mobile-base.

“With Facebook being so dependent on advertising revenue, the company needs to determine a way to generate revenue from their mobile application,” states Wisnefski. “They have started to explore with mobile advertising, however that is not enough.”

The social media sector was stressed this week on the trading floor as perhaps investors expected Facebook to impact the overall sector. Wisnefski further announced his outlook for the second half of 2012.

“Twitter is interesting because as it operates in the shadows of Facebook, during major news developments, Twitter generates more usage,” states Wisnefski. “While Twitter is not ready for an IPO, we do know that both Facebook and Twitter have their own place in today’s market. What we are seeing from LinkedIn is much more successful as they have done a great job generating multiple revenue streams and can become the success story from the social media IPO era.”

While Wisnefski feels LinkedIn has succeeded thus far, he further feels Groupon has tremendous opportunity for success moving forward.

“Groupon seems to be one of those companies that have the best opportunity to scale revenue since their operations are very clean,” states Wisnefski. “They have succeeded in selling local, however the company has spawned so many competitors on a local-basis. We have seen, from a business and marketing perspective, their residual impact has been positive. The firm needs to focus on creating national attention by generating packages on the national level with major retailers.”

The social media industry has built a ton of excitement and buzz over the past 12 months, however investors approach with more caution.

“With the NFL season upon us, Facebook reminds me of Tim Tebow. People are very polarized about each of them. Some feel both are not going to amount to the hype while others contend they will enormous successes. In both cases though, people cannot stop talking about them and continued interest in them persists,” concludes Wisnefski.

For the second-half of 2012, expect these companies to explore innovative concepts that will look to generate additional revenue streams.

About WebiMax:
Led by serial web entrepreneur Kenneth Wisnefski, WebiMax has become the leader in online marketing services, including a focus on Search Engine Optimization, Search Engine Marketing, Paid Search and PPC, Website Design and Development, Reputation Management, and more. The company was selected as one of America’s Most Promising Companies (2011) by Forbes Magazine and recently awarded one of Philadelphia’s Fastest Growing Companies (2012 and 2011) by the Philadelphia Business Journal. WebiMax employs over 100 personnel in 12 offices including 8 U.S. based, and 4 International. Visit http://www.webimax.com/ for more information.

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John Borkowski
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