The rapid rise and fall of Facebook’s stock has given us a new financial term: Zucked.
It refers to the sudden wealth loss that occurs when a dot.com stock plunges and the founders see their paper fortunes vanish into the digital ether. It’s like the dot.com bust of the early 2000s – but with a faster cycle of wealth creation and destruction.
At least the dot-commers got to enjoy their fantasy fortunes for a couple years. The social-media and current web crowd had just a few months (or in some cases weeks) to feel the joys of being a paper billionaire.
Steven Kaplan of Chicago University’s Booth School said the latest hyper-cycle of tech wealth reflects the fact that fortunes are highly dependent on the daily swings of stock markets and fickle moods of investors.
“The social media fortunes have been very volatile,” he said. “This reflects the fact that the valuations of social media firms have fluctuated wildly over the last year with fluctuations in investor expectations about future company cash flows and success.Page 1 of 5 | Next Page