Friday, May 18th, 2012: The day Facebook went public. With high anticipation from potential buyers, current stockholders, and Facebook users across the globe, everyone was biting their nails, waiting to see if the company’s stock would meet or even exceed expectations.
Mark Zuckerberg, the company’s 28 year-old CEO, symbolically rang the NASDAQ’s opening bell from Facebook’s headquarters inMenlo Park,Calif.Surrounded by cheering Facebook employees, he pushed the button that signals the opening of the stock market inNew York. The morning’s events followed an all-night “hackathon” at the company, where engineers stayed up coding software and conjuring up new ideas for Facebook and its 900 million users. Although, Zuckerberg reminds people that this public offering isn’t entirely about the money. “Right now this all seems like a big deal. Going public is an important milestone in our history. But here’s the thing, our mission isn’t to be a public company. Our mission is to make the world more open and connected,” Zuckerberg said. “In the past eight years, all of you out there have built the largest community in the history of the world. You’ve done amazing things that we never would have dreamed of and I can’t wait to see what you guys all do going forward.”
The results: its stock closed at $38.23, up only 23 cents from the previous day’s closing. An improvement, but not quite within the range of expectations for the social media giant. The closing price means Facebook is worth about $105 billion, more than Amazon.com, McDonalds and storiedSilicon Valleyicons Hewlett-Packard and Cisco. Though Facebook remains a superpower in the social media world, many people looked for a big first-day pop in Facebook’s share price; the single-digit increase was somewhat of a letdown. The small jump in price could be seen as an indication that Facebook and the investment banks that set up the initial public offering priced the stock within a suitable range. Facebook also offered nearly 20% of its available stock in the IPO, ensuring there was enough stock to meet demand. In contrast, Google offered just 7.2 percent of its stock when it went public in 2004 – causing the stock to rise 18% in just one day.
Perhaps it was impossible for Facebook to live up to the hype that led up to its IPO. It’s Facebook, after all, a place where people are emotionally invested in endless online diversions and rekindled friendships. “It’s probably one of the first times there has been an IPO where everyone sort of has a stake in the outcome,” said Gartner analyst Brian Blau. While most Facebook users won’t see a penny from the offering, they are all intimately familiar with the company.
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