Facebook IPO: Social Media Stock Market Debut


Facebook IPO was one of the most anticipated events in the entire history of Wall Street. Many people who witnessed the event say that it was not up to their expectations.  This was after its stock closed at $38.23. This value will translate to Facebook having a market share of $105 billion. This share is high above that of many well established corporations like Amazon.com, Cisco and HP. Remember facebook was started in 2004 from a college hostel in Harvard.

The founder of facebook, Mark Zuckerberg is now worth $19 billion USD. That net worth earns him a place as one of the richest person in the world who is under 30 years old.

The facebook IPO was at a friendly price of less than $40 which allowed the ordinary investors to buy the shares right from day one. These investors had a field day buying shares. This was also a good thing for all the investors who had had shares in facebook before. They had owned up to 421 million shares before the IPO was announced. A higher price than $38 dollars would have reduced the stake of the earlier investors.

There was a sale of 421 shares that day. These shares were able to raise a capital of $16 billion USD. These shares make up 15 percent of the total value of facebook.  The owner of facebook and other executive officers own 85 per cent of the shares.

On the material day the stock was opened at $42.05 but as time progressed the price of each share fell to $38.01. The highest price it was traded at was $45 on that IPO day. As the day was closing, 570 million shares had been traded.  This was a very huge volume of trade for facebook which was trading on the bourse as FB.

Preparations for Facebook IPO

The stock brokerage firm TD Ameritrade reported that more than 60,000 orders had been placed on line up awaiting the opening of facebook IPO. There were some technical problems which made the trading of facebook shares to be delayed by 30 minutes.

What are the other Social media companies which have gone public?

There are also a number of social media companies which have gone public in the past. One of them is the online game company Zynga Inc., the review site Yelp inc. The shares of these companies went low based on the outcome of facebook reception which had gone before them. Facebook will now on be ranked based on its economic performance in terms of revenue generation.

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