Facebook Prices IPO at $38 a Share, Closes Barely Above Offer After Nasdaq Delay
MENLO PARK, Calif., May 18 - Facebook began trading on the Nasdaq on Friday, closing its first day as a public company at $38.23 a share, barely above its $38 offer price after a delayed start and a late day rush to keep the stock from falling below it.
By Priya Kanth, Business & Economy
· 2 min read
The essentials
- •The company raised about $16 billion in the offering, one of the largest in American history, valuing the social network at roughly $104 billion.
- •Zuckerberg rang the Nasdaq opening bell remotely from Facebook's campus in Menlo Park.
- •Facebook has about 900 million monthly users and is the center of how a large part of the world shares photos and keeps in touch.
- •Many individual investors had hoped for a first day pop like the ones that followed the debuts of Google in 2004 and LinkedIn last year.
The short answer
MENLO PARK, Calif., May 18 - Facebook began trading on the Nasdaq on Friday, closing its first day as a public company at $38.23 a share, barely above its $38 offer price after a delayed start and a late day rush to keep the stock from falling below it. The company raised about $16 billion in the offering, one of the largest in American history, valuing the social network at roughly $104 billion.
MENLO PARK, Calif., May 18 - Facebook began trading on the Nasdaq on Friday, closing its first day as a public company at $38.23 a share, barely above its $38 offer price after a delayed start and a late day rush to keep the stock from falling below it.
The company raised about $16 billion in the offering, one of the largest in American history, valuing the social network at roughly $104 billion. Founder and chief executive Mark Zuckerberg, who is 28, remains in control of the company through special voting shares.
Shares were supposed to open at 11 a.m. Eastern. Technical problems at Nasdaq pushed the first trade back by about 30 minutes. The stock opened above $42, jumped briefly to $45, then slid through the afternoon. Underwriters led by Morgan Stanley were reported to be buying shares near the offer price to keep it from breaking below $38.
Zuckerberg rang the Nasdaq opening bell remotely from Facebook's campus in Menlo Park. "Our mission isn't to be a public company," he said.
Why it matters: Facebook has about 900 million monthly users and is the center of how a large part of the world shares photos and keeps in touch. But it has a business problem. Mobile use is growing fast, and the company has struggled to make as much money from phones as it does from desktop computers. Earlier this week, General Motors said it would stop paying for ads on the site, adding to doubts about whether Facebook ads work.
Many individual investors had hoped for a first day pop like the ones that followed the debuts of Google in 2004 and LinkedIn last year. The muted result has led some to question whether the price was set too high.
The company's first quarterly report as a public firm will arrive this summer, and will be watched closely for signs of progress on mobile revenue.
For now, Facebook is a public company, with a stock price that will be tested daily.
Sources
- 01Facebook stock up slightly in public debut, MPR Newsmprnews.org
- 02Facebook IPO fizzles, May 18, 2012, Christian Science Monitorproof.csmonitor.com
- 03Initial public offering of Facebook, Wikipediaen.wikipedia.org
Corrections
No corrections have been made to this article.
About the reporter
Senior Business & Economy Reporter, Trestlewire
I was an equity research analyst for five years and have been a financial reporter since 2000. I covered the end of the dot-com bubble from a markets desk, spent the autumn of 2008 reading bank filings at two in the morning in Chicago, and have written about every Federal Reserve rate cycle since. The lesson from all of it is short: the number comes first, and the story is the explanation for the number.
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