The NASDAQ was embarrassed today as the Facebook stock IPO ended the trading day on a thud. Thanks to underwriters, like JPMorgan and Goldman Sachs, the price of Facebook shares finished slightly higher than the initial public offering price of $38 per share at $38.23. Mark Zuckerberg is now worth north of $19 Billion dollars with hundred of company employees instant millionaires. At one point, Zuckerberg was worth $21 Billion when Facebook stock hit $42.05 just minutes after trading began. But the price dropped as the day wore on while all of the stock markets lost due to renewed concerns over the European Union debt crisis. Still, Zuckerberg, his employees and the State of California were big winners today, with California looking to collect an extra $2 Billion in taxes. Where is Jamie Dimon?
Many analysts were trying to compare Facebook with the Google IPO. Google opened at $85 and jumped to $107 as trading started, ending at $135 a share its very first day. Google now trades at about $600 a share. Even with the disappointing start, the Facebook IPO made it the second largest in US history after VISA. The king of social networking is now worth some $104 Billion dollars, putting it ahead of corporations like General Motors. Is Facebook really worth it, or could it become another MySpace?
The test of time will tell the tale. For starters, Google has a better revenue stream from advertisers, averaging one advertising ′click′ for about every 2,000 clicks on their webpages. Facebook′s ratio is closer to one in 250,000, not exactly a good sign. Yet, some 900 Million users are on Facebook, making it a major player on the Internet. The problem Facebook faces, if you pardon the pun, is the future as society moves more and more towards mobile apps, an area Facebook is still struggling with.
With some 500 million shares traded on the NASDAQ today, the Facebook IPO could be considered a success. Mark Zuckerberg with his $19 Billion and the hundreds of employees who are now instant millionaires are certainly happy. But will investors be happy if the Facebook stock price does not perform well in the upcoming days and weeks? Th next six months will be crucial as current holders of the stock prior to the IPO cannot sell and reap their rewards. The failure of the Facebook opening price to skyrocket helped dragged down other related stocks, like Zynga, which runs many game apps on Facebook, lost 9% today and had trading suspended twice due to the sell-off.
May 18th, 2012 at 5:33 pm
I don’t even own a share of FACEBOOK Stock and it was like a Roller Coaster Ride, today.
First, the Kamikazi Dive, then the wobbly uncertain struggle back North.
Then staggering like a drunk that can’t find his way home.
May 19th, 2012 at 2:51 am
Hmm, I’ve heard the luddites talking this talk on TV and they are wrong. Facebook doesnt even throw advertising on user pages yet. But note the large blank sidebars on your accounts. It will come when they think they have enough mass that nobody can really leave. You will be able to opt out, of course, by paying an annual fee. Facebook is a goldmine of untapped revenue.
May 19th, 2012 at 5:29 am
This reminds me of the racket that is cable TV.
In my town, at least 20 of the channels are devoted to programing aimed at blacks. Another 10 are Spanish Speaking and another 10 or 12 are religious programing. Not to mention a half dozen blatantly Leftist news outlets.
But, the cynical bastards have the ‘Must Have’ channels spread throughout the tiers so that you are going to pay $120.+ a month, even if you only watch a dozen or so of the 100+ channels you are paying for.
The Cable Companies have full time lobbyists making sure that Congress doesn’t touch any ‘A La Carte Cable’ legislation.
May 21st, 2012 at 12:56 pm
HAH! Zuckerberg lost another $2 Billion today as the markets defriend FB.