groveChuck
U-matic Member
Wish I'd gotten an early hookup on this!
Facebook Inc. gained as much as 18% in its trading debut, following a record initial public offering that made the social network more costly than almost every company in the Standard & Poor's 500 Index.
The shares advanced 11% to $42.18 at 11:30 a.m. in New York, after earlier surging as high as $45, giving it a market value of $123.4 billion.
Facebook sold 421.2 million shares at $38 each to raise $16 billion yesterday.
The IPO price valued the company at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.
Facebook's Mark Zuckerberg rings the Nasdaq bell.
That valuation also made Facebook the largest company to go public in the U.S. Now co-founder Mark Zuckerberg has to reward investors by squeezing more profit out of advertising, said Erik Gordon, a professor at the University of Michigan's Ross School of Business.
"It shows tremendous confidence in the guy wearing the hoodie," said Mr. Gordon, referring to Zuckerberg and the signature sweatshirt he wore during meetings to market the stock. "He hasn't specified how he's going to do it, but he'll have to do it to justify this price."
In less than a decade, Mr. Zuckerberg, 28, has overseen Menlo Park, Calif.-based Facebook's evolution from a Harvard University dorm-room project into a social network with more than 900 million users. Still, revenue growth is poised to slow for a third straight year and advertising sales haven't kept pace with user additions.
Facebook priced at the top end of its range of $34 to $38 a share, valuing it at about 26 times sales in the 12 months through March 31. As of yesterday, that was more than twice as much as AvalonBay Communities Inc., currently the most costly company by that measure in the S&P 500.
"It seems like a very full valuation, but I'm sure there was an almost insatiable amount of retail interest in Facebook and that's how the bankers looked at it," said Dan Veru, chief investment officer at Palisade Capital Management in Fort Lee, N.J. "Everyone wants a piece of Facebook."
At $16 billion, Facebook's sale surpassed that of General Motors Co., making it the second-largest in U.S. history, excluding so-called over-allotments, which let underwriters buy more shares at a later date, data compiled by Bloomberg show.
GM raised $15.8 billion in November 2010, before expanding the sale to $18.1 billion when underwriters exercised the over-allotment option. Visa Inc. raised $17.9 billion in its 2008 IPO, the biggest in the U.S., and later expanded the sale to $19.7 billion. Facebook's underwriters may buy an additional 63.2 million shares at the IPO price, which would enlarge the IPO to as much as $18.4 billion.
Facebook's offering price gave it a market capitalization almost double the $60 billion United Parcel Service Inc., previously the biggest company to complete an IPO, was valued at when it went public in 1999, according to data compiled by Bloomberg and Dealogic.
Facebook stock is listed on the Nasdaq Stock Market under the symbol FB.
The IPO price gave Facebook a market value about half the size of Google Inc., which was worth more than $200 billion as of yesterday. The search-engine operator's value has jumped almost ninefold in the eight years since it went public. To hand its public owners the same returns after pricing at the top of its offering range, Facebook would have to be worth about $920 billion by 2020. Apple Inc., the most valuable company in the world, had a market value of about $496 billion as of yesterday.
Facebook's offering eclipsed the 2004 IPO of Google, one of its chief competitors for online advertising. Google raised $1.9 billion in its initial share sale, including an over-allotment option. The shares sold at $85 apiece, giving Google a market value of about $23 billion, or about 10 times sales in the 12 months through June 30, 2004.
More: http://adage.com/article/digital/fa...mail&utm_medium=newsletter&utm_campaign=adage
Facebook Inc. gained as much as 18% in its trading debut, following a record initial public offering that made the social network more costly than almost every company in the Standard & Poor's 500 Index.
The shares advanced 11% to $42.18 at 11:30 a.m. in New York, after earlier surging as high as $45, giving it a market value of $123.4 billion.
Facebook sold 421.2 million shares at $38 each to raise $16 billion yesterday.
The IPO price valued the company at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.
Facebook's Mark Zuckerberg rings the Nasdaq bell.
That valuation also made Facebook the largest company to go public in the U.S. Now co-founder Mark Zuckerberg has to reward investors by squeezing more profit out of advertising, said Erik Gordon, a professor at the University of Michigan's Ross School of Business.
"It shows tremendous confidence in the guy wearing the hoodie," said Mr. Gordon, referring to Zuckerberg and the signature sweatshirt he wore during meetings to market the stock. "He hasn't specified how he's going to do it, but he'll have to do it to justify this price."
In less than a decade, Mr. Zuckerberg, 28, has overseen Menlo Park, Calif.-based Facebook's evolution from a Harvard University dorm-room project into a social network with more than 900 million users. Still, revenue growth is poised to slow for a third straight year and advertising sales haven't kept pace with user additions.
Facebook priced at the top end of its range of $34 to $38 a share, valuing it at about 26 times sales in the 12 months through March 31. As of yesterday, that was more than twice as much as AvalonBay Communities Inc., currently the most costly company by that measure in the S&P 500.
"It seems like a very full valuation, but I'm sure there was an almost insatiable amount of retail interest in Facebook and that's how the bankers looked at it," said Dan Veru, chief investment officer at Palisade Capital Management in Fort Lee, N.J. "Everyone wants a piece of Facebook."
At $16 billion, Facebook's sale surpassed that of General Motors Co., making it the second-largest in U.S. history, excluding so-called over-allotments, which let underwriters buy more shares at a later date, data compiled by Bloomberg show.
GM raised $15.8 billion in November 2010, before expanding the sale to $18.1 billion when underwriters exercised the over-allotment option. Visa Inc. raised $17.9 billion in its 2008 IPO, the biggest in the U.S., and later expanded the sale to $19.7 billion. Facebook's underwriters may buy an additional 63.2 million shares at the IPO price, which would enlarge the IPO to as much as $18.4 billion.
Facebook's offering price gave it a market capitalization almost double the $60 billion United Parcel Service Inc., previously the biggest company to complete an IPO, was valued at when it went public in 1999, according to data compiled by Bloomberg and Dealogic.
Facebook stock is listed on the Nasdaq Stock Market under the symbol FB.
The IPO price gave Facebook a market value about half the size of Google Inc., which was worth more than $200 billion as of yesterday. The search-engine operator's value has jumped almost ninefold in the eight years since it went public. To hand its public owners the same returns after pricing at the top of its offering range, Facebook would have to be worth about $920 billion by 2020. Apple Inc., the most valuable company in the world, had a market value of about $496 billion as of yesterday.
Facebook's offering eclipsed the 2004 IPO of Google, one of its chief competitors for online advertising. Google raised $1.9 billion in its initial share sale, including an over-allotment option. The shares sold at $85 apiece, giving Google a market value of about $23 billion, or about 10 times sales in the 12 months through June 30, 2004.
More: http://adage.com/article/digital/fa...mail&utm_medium=newsletter&utm_campaign=adage
