Facebook IPO: A few days prior to their official release into the public, Facebook announced that they were raising the price of shares for its initial public offering.
Facebook IPO – Facebook’s Huge Value
According to Mercury News, Facebook updated its filing with the Securities and Exchange Commission on Tuesday morning, raising the maximum price of its IPO shares to $38. Because of that increase for the Facebook IPO, Facebook would be valued at more than $104 billion and bring in $12.8 billion. Moreover, Facebook was expected to sell 337 million shares to investors Thursday night. The Facebook stock hit the open market Friday morning on the Nasdaq stock exchange under the ticker symbol FB, with Zuckerberg ringing the traditional opening bell from the company’s Peninsula headquarters.
Facebook IPO – Fell Short of Expectations
The rise in the Facebook IPO was confounding to chief investment strategist at the private-banking unit of KeyCorp, Bruce McCain, who told Bloomberg News,
“They get more money upfront if they can make it go, but if the enthusiasm is weak out of the gate, it makes it that much more difficult for the company going forward. You would think they would be a little more cautious.”
Unfortunately, McCain is seemingly right, as the Facebook IPO fell short of its high expectations. According to another report by the Mercury News, while Facebook set records for valuation and volume of first-day trading, it failed to satisfy the expectations of many around the world who were looking for a huge bump in the social networking giant’s share price. The stock ended the day slightly above the $38 price set for the initial public offering. Underwriters stepped in to keep it from falling below that level, which was nearly $4 lower than the price at which trading began Friday morning. While the stock went up, down, up, then down again, many were comparing the Facebook IPO to Google, where Google’s stock rose 18 percent on its first day of trading in 2004. According to Wedge Partners analyst Martin Pykkonnen, with an IPO that raised $16 billion, at a share price that gives Facebook a total market value of $104 billion, the first-day performance was solid.
Facebook IPO – Zuckerberg’s Success
However, it wasn’t all smooth sailing for the Facebook IPO. After its expected start of 8 a.m. Pacific Time, Facebook’s debut was delayed about 30 minutes after the operators of the Nasdaq exchange reported an unexplained hitch in opening the trading.
Zuckerberg’s 503 million shares are worth more than $19 billion, making him richer than Google CEO Larry Page, whose wealth was estimated at $18.7 billion.
Facebook IPO Huge Success but Falls Short of Expectations.