Social Media Bubble Infographic

THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 kila 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 其 THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 其 THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 其 THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 其 THE SOCIAL MEDIA BUBBLE It's been seen far too often in recent memory - valuations soar and investors flock as rapidly-growing markets promise huge returns on speculative investments. Whether during the late 90's dot-com boom, the bursting of the real estate bubble, or the current expansion of social media, billions have been made - and lost - overnight as growth takes priority over solid business practice. "But this time, with social media, it's different, right?" Think again: the explosive growth and patchy business models of these social empires have more in common with earlier busts than most are willing to admit. DOT-COM ERA The wild west of digital entrepreneurs • MARCH 11, 2000: A DAY AT THE TOP "IT'S DIFFERENT THIS TIME" $4 TO $6 TRILLION Nasdag peaked at 5,046.86 Amount of shareholder wealth lost 650,000 Bottomed out at 1114.11 NUMBER OF DOT-COM JOBS CREATED IN 1999 NUMBER OF IP0S WITH AN ORIGINAL FILING PRICE MIDPOINT OF AT LEAST S8 - CASUALTIES: O Offer Price per share O First-day closing price per share • Closing price per share on 01/16/01 89 79 239.25 250 267 $156, 25 319 338 333 S126.38 366 391 437 449 $63.50 572 $30 S24 $2.26 11/19/99 $2.48 $7.98 S0.05 12/09/99 09/28/99 11/13/98 VA Linux Cacheflow Foundry Networks REAL ESTATE Drowning in a flood of foreclosures "IT'S DIFFERENT THIS TIME" 80% Total decrease in home sales from their peak in July 2005 |23% of homebuyers purchased houses as investments Prior to the real estate bust, 13% Amount of empty homes in America Amount home prices have fallen 32% Amount home prices fell during the Great Depression 25.9% 23.1% • POST-BURST FORECLOSURES MILLION ofuS. homeowners had a mortgage 3.16 MILLION worth more than their homes DANGEROUS NEW MORTGAGE PRACTICES 2.2 MILLION 1.96 MILLION ADJUSTABLE RATE MORTGAGES Transfers risk of higher interest rate to the homeowner 1.26 MILLION 847,000 REVERSE MORTGAGES Outrageous fees put the home at risk- FTC considers these to be the most fraudulent mortgages SUBPRIME MORTGAGES 2005 2006 2007 2008 2009 2010 High interest rates often lead to borrowers defaulting on loans $275.000 $250,000 $225,000 $200,000 $175,000 $150,000 UNITED STATES HOUSE PRICES 1970 2010 SOCIAL MEDIA "IT'S DIFFERENT THIS TIME" Like their early dot-com counterparts, these social giants boast a high valuation with little-to-no revenue or value created. While many experience initial stock market success, most fall into sub-par returns. Investors are rushing to fund these ventures just like during the real-estate boom with no guarantee of future profitability. Key Players INSTAGRAM PURCHASED BY FACEBOOK FOR $1 BILLION VALUATION: $1.2 billion FACEBOOK REVENUE: DO VALUATION: $104 billion - IPO RAISED: $16 billion - UNDERWRITING FEES: $176 MILLION OPENING PRICE: D38 $38.23. 0.6% INCREASE CLOSED AT: GROUPON VALUATION: $13 billion - PO RAISED: $700 million YELP $900 million $107 million $15 $24.50 - UNDERWRITER FEES: $17.4 MILLION - VALUATION $20 $26.11 OPENING PRICE: - IPO RAISED: 31% INCREASE • CLOSED AT OPENING PRICE: 64% INCREASE CLOSED: Sources tpwww.pbs.ergwghh/pagesfrontlinehewsdetcenthinkingstats ht httywww.investapedia.comfeaturesicrashescrasheslasplaztvelpM ZYNGA htywww.heatlaticwire.comtechnolegy2elish secial media beble5231 httpendoltheamericandream.com/archives/27-amaring statistics-about-the real estate crasb that aever-seems to end mere forecleseres merederwater ertgges and mere home price declines htwww.marketeracle.cokrticle2 e VALUATION: $7 billion $1 billion httpwww.censsgvcenstenpriceannpd httyarticlesydailynews.com12-02-22ews/ 531heme sales housing market heme resales shet ywww.jparsons netheusingbubble http:www.daveramsey.com/articleimertgage-eptions to-aveiddeandmoney mertgagelatiddavesays httywww.investepedia.comterma/ssubprime mertgageasplaclvnpdvCIP - IPO RAISED: ywww.vea.ergledex.phpeprion-com.cotentviewarticleid-3hemid-10 httpwww.theatlanticwire.comtechnology 212elfish secial-media-bubbles14 httywww.bloomberg.com/news201143most netwerking site companies will be everpriced butlen says.hl tyhlegs wsj.cemdeals/2011/8/wall street rakes in 42 milien from groupen ipe httpwww.forbes.com/ites/quera21 /wy wasyelps-ipo price-se-law-was-mispriced - UNDERWRITER FEES: $32.5 MILLION ttymoney.con.con2012Ihechnelegyfacebook pe warningindexhtm $10 $9.50 beline wsi.cemianicleSB10012SZ0De574190011836414el - OPENING PRICE: httparticles.com.com2012-05-17techtech social media lacebook iporeactions1lacebook steck lacebeok si pe lacebook accoun sMTECH tywww.businessweek.com/articles/2012-05 1nine things you should knew about dacebeoks ipe http:www.brimes.com/articles44 taceboek-ipe underwriter-lee-shares-uckerberg-sandberg htm OCLOSING PRICE: DECREASE htyanicles latimes.com/0neUusinesslaigreupen ipe 201110S tyarticles businessinsider.com/11-11-15tech05831grpe ipe prscess eric-lelkatsky httpwww.aateday.com/meneyindtriestechnelogytery20123yelp-ipe frat-day1544n httywww.bloomberg.com/news201243-02yelp serges-in trade debut aher initial etler caises mere than terecas Ltel Online Degree Directory http:hews.cnet.com01-1 3S734S-17/were-the-analysts-right-ynga-shares-down-in drst rading-day httywww.iexwetrust.com12/1Mech talk eey facebok ipe price has been set hew ech is Cut through the clutter. Find your degree today! htydealbeok.nytimes.com/2011/12/stwe ways-ler-banks to win 1995 其