NEW YORK — It was barely a “like” and definitely not a “love” from Facebook investors as the online social network’s stock failed to live up to the hype in its trading debut Friday.
One of the most anticipated IPOs in Wall Street history ended on a flat note, with Facebook’s stock closing at $38.23, up 23 cents from Thursday night’s pricing.
That meant the company founded in 2004 in a Harvard dorm room has a market value of about $105 billion, more than Amazon.com, McDonald’s and Silicon Valley icons Hewlett-Packard and Cisco.
It also gave 28-year-old CEO Mark Zuckerberg a stake worth $19,252,698,725.50.
“Going public is an important milestone in our history,” Zuckerberg said before he pushed a button that rang Nasdaq’s opening bell from company headquarters at 1 Hacker Way in Menlo Park, Calif. “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.”
But for many seeking a big first-day pop in Facebook’s share price, the increase of six-tenths of one percent was a letdown.
“This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. “With all the drumbeats and hype, I don’t think there’ll be barroom bragging tonight.”
Added Nick Einhorn, an analyst with IPO advisory firm Renaissance Capital: “It wasn’t quite as exciting as it could have been. But I don’t think we should view it as a failure.”
Indeed, the small jump in price could be seen as an indication that Facebook and the investment banks that arranged the IPO priced the stock in an appropriate range.
It was good for ordinary investors, who are shut out from the IPO price and have to buy the stock at a high price on day one.
Had the stock shot to $60, early investors would have been left feeling that they had not gotten their money’s worth for their stakes.
Facebook offered 15 percent of its available stock in the IPO, so there was enough to meet demand. The other 85 percent is still owned by Zuckerberg and other Facebook executives, employees and early investors. In comparison, Google offered just 7.2 percent of its stock when it went public in 2004 — and rose 18 percent on day one.
Here was Facebook’s “timeline” Friday, trading under the symbol “FB” on the Nasdaq Stock Market:
The stock opened at 11:30 a.m. at $42.05, but soon dipped to $38.01. It briefly traded as high as $45 and by noon was at $40.40. It fluttered throughout the afternoon and hugged the $38 mark for much of the final hour, before closing at $38.23.
By the end of the day, about 570 million shares had changed hands, a huge trading volume for any company.
TD Ameritrade reported that in the first 45 minutes of trading, Facebook accounted for a record 24 percent of trades executed by its customers.
By comparison, on its first day back on the stock market, in November 2010, General Motors represented 7 percent of trades on the online brokerage.
Steve Quirk, who oversees trading strategy at TD Ameritrade, said that about 60,000 orders were lined up before Facebook opened.
Technical glitches delayed the start of Facebook’s trading by a half-hour. The Securities and Exchange Commission also is investigating problems traders encountered in changing and canceling their orders.
Other social media companies, most of which have gone public in the last year, saw their shares plummet when it became clear what kind of reception Facebook was getting in the public market. Shares of game-maker Zynga Inc. and reviews site Yelp Inc. both hit all-time lows.
The stock market will now begin assigning a dollar value to Facebook based primarily on its financial performance. If Facebook can continue to increase its revenue and profit at the rate it has the past few years, the stock should rise. Google reported strong earnings after it became a public company, and its stock price more than tripled the first year, from $85 to $280.
Facebook’s stock price will also depend somewhat on broad economic forces, as well as the whims of investors.
Facebook is one of those rare companies whose IPO transcends Wall Street’s money lust. Since its start as a scrappy network for college students, Facebook has come to define social networking by getting its 900 million users around the world to share everything from photos of their pets to their deepest thoughts.
Most tech companies going public want a big rise in their debut to show they’re “strong, dynamic companies standing out in the crowd,” said Francis Gaskins, president of researcher IPOdesktop, but Facebook already has that image, and so may not care.
Few of the Internet companies to go public recently have been profitable. But Facebook had net income of $205 million in the first three months of 2012, on revenue of $1.06 billion. In 2011, it earned $1 billion on revenue of $3.7 billion, up from earnings of $606 million and revenue of $2 billion a year earlier.
That’s a far cry from 2007, when it posted a net loss of $138 million and had revenue of $153 million. The company makes most of its money from advertising. It also takes a cut from the money people spend on virtual items in Facebook games such as “FarmVille.”
Facebook’s public debut marked a milestone in the history of the Internet. In 1995, Netscape Communications’ IPO gave people their first chance to invest in a company whose graphical Web browser made the Internet more engaging and easier to navigate. Its hotly anticipated IPO lit the fuse that ignited the dot-com boom. That explosion of entrepreneurial activity and investment culminated five years later in a devastating bust that obliterated the notion that the Internet had hatched a “new economy.”
It took Google Inc.’s IPO in 2004 to prove that an Internet company with a revolutionary idea could be profitable. In the process, the Internet search leader is forcing other industries to adapt to a new order where people have come to expect to be able to find just about anything they want by entering a few words into a box on any device with an Internet connection.
Facebook’s IPO almost certainly will enrich other up-and-coming entrepreneurs as Zuckerberg uses the company’s cash and stock to buy other startups in an effort to bring in other talented engineers and promising technology. That’s what Google has been doing for years. Since it went public in 2004, Google has spent $10.2 billion buying nearly 200 other companies. Those figures don’t include Google’s pending $12.5 billion acquisition of cellphone maker Motorola Mobility Holdings Inc., which is still awaiting regulatory approval in China.
Zuckerberg’s biggest deal so far came when he agreed to buy Instagram, a maker of a popular mobile app for photos, for $1 billion in April. Because most of the deal is being paid for in stock, Instagram is already getting richer. Based on Facebook’s current share price, Instagram is in line to receive about $1.2 billion.
Friday’s debut, though, resulted in deals worth much less.
Alper Aydinoglu, a DePaul University student who got 50 shares via Etrade at $38, said he was “disappointed with the first day of trading.”
His gain on paper: $11.50, but that was before Etrade’s standard commission of $9.99.
Aydinoglu still called it an excellent learning opportunity.
“On top of everything, I now have the bragging rights that I participated in one of the most popular IPOs of all time.”
___
AP Technology Writers Michael Liedtke in San Francisco and Peter Svensson in New York, Associated Press Writer Marcus Wohlsen in Menlo Park, Calif., and AP Business Writers Bernard Condon, Pallavi Gogoi and Joseph Pisani in New York contributed to this story.
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IT WAS was barely a ”like” and definitely not a ”love” from Facebook investors as the online social network’s stock failed to live up to the hype in its trading debut.
One of the most anticipated floats in Wall Street history ended on a flat note, with Facebook’s stock closing at $US38.23, up 23¢ from its launch price.
That meant the company, founded in 2004 in a Harvard dorm room, has a market value of about $105 billion, more than McDonald’s or Amazon.com. It also gave 28-year-old CEO Mark Zuckerberg a stake valued at $19.25 billion.
Ring-a-ding: Mark Zuckerberg rings the Nasdaq opening bell.
More than 82 million shares were traded in the first 30 seconds, as investors chased after the stock in a flotation that valued the social network at 27 times its turnover, inviting comparisons with the days of the 17th-century Dutch tulip mania or the South Sea Bubble.
The stock soared 11 per cent initially before dropping to close to the $38 offer price. Privately, dealers speculated that Facebook’s army of bankers had stepped in to prevent the public relations disaster of the shares falling below $38.
”Going public is an important milestone in our history,” Mr Zuckerberg said before he pushed a button that rang Nasdaq’s opening bell from company headquarters in California. ”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.”
But for many seeking a big first-day pop in Facebook’s share price, the 23¢ increase was a letdown.
”This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. ”With all the drumbeats and hype, I don’t think there’ll be bar-room bragging tonight.”
Facebook offered 15 per cent of its available stock in the float, so there was enough to meet demand. The other 85 per cent is still owned by Mr Zuckerberg and other Facebook executives, employees and early investors.
At $38 a share, Facebook created 88 people with fortunes of more than $30 million, according to analyst firm Wealth-X.
The sale reaped enormous rewards for Facebook’s co-founders and early backers. A co-founder, Dustin Moscovitz, is now worth more than $5 billion. Elevation Partners, an investment firm that counts U2 singer Bono among its partners, holds shares valued at more than $1.6 billion. Elevation put money into the social networking site, taking 2.3 per cent of the company in late 2009.
Bono is joined by nine other directors who stand to profit. ”Contrary to reports,” he said, ”I’m not a billionaire or going to be richer than any Beatle – and not just in the sense of money, by the way. The Beatles are untouchable [and] those billionaire reports are a joke.”
Tags: news
RECORDER REPORT
US stocks fell on Friday after a sloppy debut by Facebook Inc spoiled hopes that a spectacular open for the most-anticipated stock sale in years would brighten the mood in what has been a gloomy month for equity markets.
Shares of Facebook, the social networking giant, were volatile in the busiest day ever for a trading debut.
After early gains of more than 10 percent, Facebook shares fell back to the $38 issue price, ending up just 0.6 percent at $38.23.
It was the Nasdaq’s most actively traded stock, with more than 566 million shares traded.
“When Nasdaq started running into some problems early on before Facebook opened – when there was a sense they kept putting it off, putting it off, the market did come under a little bit of pressure because people were getting nervous about it,” said Ken Polcari, managing director at ICAP Equities in New York.
The SP 500 dipped below 1,300, seen as a key support level, for the first time since mid-January.
Investors were cautious before leaders of the Group of Eight nations met about the euro zone debt crisis.
After delays in the scheduled start of Facebook trading raised anxiety levels among traders and onlookers outside Nasdaq’s headquarters, the stock opened at $42.05, compared with an initial public offering price of $38 a share.
It rose as high as $45 before pulling back.
Investors were left in the dark about whether their buy and sell orders on Facebook went through as the Nasdaq did not tell broker/dealers whether opening trades had been executed.
Nasdaq did not disseminate execution data until 1:50 pm (1750 GMT).
“The fact that there is this much interest in a big capital raise, an event like this is good for the markets overall,” said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
The SP 500 fell for a sixth straight day and recorded its worst week since November on growing concerns that global growth will suffer from the euro zone’s problems and signs of a slowing US recovery.
The broad index has dropped 7.3 percent so far in May.
The Dow Jones industrial average dropped 73.11 points, or 0.59 percent, to 12,369.38.
The Standard Poor’s 500 Index lost 9.64 points, or 0.74 percent, to 1,295.22.
The Nasdaq Composite Index fell 34.90 points, or 1.24 percent, to 2,778.79.
For the week, the Dow fell 3.5 percent, the SP 500 declined 4.3 percent and the Nasdaq was down 5.3 percent.
Markets are awaiting the G8 meeting when leaders of the world’s major industrial economies convene near Washington this weekend.
They will confront the continuing crisis in the euro zone, including the increasing likelihood of a Greek departure from the bloc.
“Domestically we are kind of in a lull in a sense that we are between Fed periods and earnings, so to try to find direction, one of the things that seems to be jumping up at guys is macro, global.
And right now that’s not wonderful,” said Charlop.
Shares of companies in the online social media sphere declined.
LinkedIn fell 5.7 percent to $99.02 and Groupon Inc lost 6.7 percent to $11.70.
Zynga plunged 13.4 percent to $7.16 after being halted twice during the session.
Biotechs stumbled, weighed down by an 10.9 percent drop in Sequenom Inc to $4.25 after the company said insurer Coventry Health Care Inc terminated an agreement to provide coverage for a prenatal test for Down Syndrome.
The NYSEArca biotech index dropped 2.2 percent.
Shares of Foot Locker jumped 8.3 percent to $30.33 after the athletic footwear retailer posted higher-than-expected quarterly results.
Winnebago Industries Inc advanced 1.8 percent to $8.66 after receiving an unsolicited buyout offer from North Street Capital LP, the investment firm of racing car enthusiast Alex Mascioli, valuing the No 1 US motor home maker at $321.5 million.
Volume was strong with about 8.8 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.83 billion.
Declining stocks outnumbered advancing ones on the NYSE by 2,297 to 728, while on the Nasdaq, decliners beat advancers 1,791 to 699.
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Tags: news
NEW YORK (AP) — It was barely a “like” and definitely not a “love” from Facebook investors as the online social network’s stock failed to live up to the hype in its trading debut Friday.
One of the most anticipated IPOs in Wall Street history ended on a flat note, with Facebook’s stock closing at $38.23, up 23 cents from Thursday night’s pricing.
That meant the company founded in 2004 in a Harvard dorm room has a market value of about $105 billion, more than Amazon.com, McDonald’s and Silicon Valley icons Hewlett-Packard and Cisco.
It also gave 28-year-old CEO Mark Zuckerberg a stake worth $19,252,698,725.50.
“Going public is an important milestone in our history,” Zuckerberg said before he pushed a button that rang Nasdaq’s opening bell from company headquarters at 1 Hacker Way in Menlo Park, Calif. “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.”
But for many seeking a big first-day pop in Facebook’s share price, the increase of six-tenths of one percent was a letdown.
“This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. “With all the drumbeats and hype, I don’t think there’ll be barroom bragging tonight.”
Added Nick Einhorn, an analyst with IPO advisory firm Renaissance Capital: “It wasn’t quite as exciting as it could have been. But I don’t think we should view it as a failure.”
Indeed, the small jump in price could be seen as an indication that Facebook and the investment banks that arranged the IPO priced the stock in an appropriate range.
It was also good for ordinary investors, who are mostly shut out from the IPO price and have to buy the stock in the open market on day one. They got a chance to buy all day at a price not much above $38.
And it was good for early investors in the company, who owned more than half the 421 million shares made available in the IPO. Had the stock shot to $60 Friday morning, those early investors would have felt they hadn’t gotten enough money for their stakes.
The 421 million shares that were sold fetched $16 billion and represented 15 percent of the company’s stock. Facebook got $7 billion, and the early investors $9 billion. The other 85 percent of Facebook’s stock is owned by Zuckerberg and other Facebook executives, employees and early investors. In comparison, Google offered just 7.2 percent of its stock when it went public in 2004. Its stock rose 18 percent on day one.
Here was Facebook’s “timeline” Friday, trading under the symbol “FB” on the Nasdaq Stock Market:
The stock opened at 11:30 a.m. at $42.05, but soon dipped to $38.01. It briefly traded as high as $45 and by noon was at $40.40. It fluttered throughout the afternoon and hugged the $38 mark for much of the final hour, before closing at $38.23.
By the end of the day, about 570 million shares had changed hands, a huge trading volume for any company.
TD Ameritrade reported that in the first 45 minutes of trading, Facebook accounted for a record 24 percent of trades executed by its customers.
By comparison, on its first day back on the stock market, in November 2010, General Motors represented 7 percent of trades on the online brokerage.
Steve Quirk, who oversees trading strategy at TD Ameritrade, said that about 60,000 orders were lined up before Facebook opened.
Technical glitches delayed the start of Facebook’s trading by a half-hour. The Securities and Exchange Commission also is investigating problems traders encountered in changing and canceling their orders.
Other social media companies, most of which have gone public in the last year, saw their shares plummet when it became clear what kind of reception Facebook was getting in the public market. Shares of game-maker Zynga Inc. and reviews site Yelp Inc. both hit all-time lows.
The stock market will now begin assigning a dollar value to Facebook based primarily on its financial performance. If Facebook can continue to increase its revenue and profit at the rate it has the past few years, the stock should rise. Google reported strong earnings after it became a public company, and its stock price more than tripled the first year, from $85 to $280.
Facebook’s stock price will also depend somewhat on broad economic forces, as well as the whims of investors.
Facebook is one of those rare companies whose IPO transcends Wall Street’s money lust. Since its start as a scrappy network for college students, Facebook has come to define social networking by getting its 900 million users around the world to share everything from photos of their pets to their deepest thoughts.
Most tech companies going public want a big rise in their debut to show they’re “strong, dynamic companies standing out in the crowd,” said Francis Gaskins, president of researcher IPOdesktop, but Facebook already has that image, and so may not care.
Few of the Internet companies to go public recently have been profitable. But Facebook had net income of $205 million in the first three months of 2012, on revenue of $1.06 billion. In 2011, it earned $1 billion on revenue of $3.7 billion, up from earnings of $606 million and revenue of $2 billion a year earlier.
That’s a far cry from 2007, when it posted a net loss of $138 million and had revenue of $153 million. The company makes most of its money from advertising. It also takes a cut from the money people spend on virtual items in Facebook games such as “FarmVille.”
Facebook’s public debut marked a milestone in the history of the Internet. In 1995, Netscape Communications’ IPO gave people their first chance to invest in a company whose graphical Web browser made the Internet more engaging and easier to navigate. Its hotly anticipated IPO lit the fuse that ignited the dot-com boom. That explosion of entrepreneurial activity and investment culminated five years later in a devastating bust that obliterated the notion that the Internet had hatched a “new economy.”
It took Google Inc.’s IPO in 2004 to prove that an Internet company with a revolutionary idea could be profitable. In the process, the Internet search leader is forcing other industries to adapt to a new order where people have come to expect to be able to find just about anything they want by entering a few words into a box on any device with an Internet connection.
Facebook’s IPO almost certainly will enrich other up-and-coming entrepreneurs as Zuckerberg uses the company’s cash and stock to buy other startups in an effort to bring in other talented engineers and promising technology. That’s what Google has been doing for years. Since it went public in 2004, Google has spent $10.2 billion buying nearly 200 other companies. Those figures don’t include Google’s pending $12.5 billion acquisition of cellphone maker Motorola Mobility Holdings Inc., which is still awaiting regulatory approval in China.
Zuckerberg’s biggest deal so far came when he agreed to buy Instagram, a maker of a popular mobile app for photos, for $1 billion in April. Because most of the deal is being paid for in stock, Instagram is already getting richer. Based on Facebook’s current share price, Instagram is in line to receive about $1.2 billion.
Friday’s debut, though, resulted in deals worth much less.
Alper Aydinoglu, a DePaul University student who got 50 shares via Etrade at $38, said he was “disappointed with the first day of trading.”
His gain on paper: $11.50, but that was before Etrade’s standard commission of $9.99.
Aydinoglu still called it an excellent learning opportunity.
“On top of everything, I now have the bragging rights that I participated in one of the most popular IPOs of all time.”
___
AP Technology Writers Michael Liedtke in San Francisco and Peter Svensson in New York, Associated Press Writer Marcus Wohlsen in Menlo Park, Calif., and AP Business Writers Bernard Condon, Pallavi Gogoi and Joseph Pisani in New York contributed to this story.
Copyright AP Modified, Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Tags: news
Updated: Fri May. 18 2012 16:07:28
CTVNews.ca Staff
Facebook fever gripped Wall Street on Friday as the massive social network’s IPO was hit the Nasdaq — but after a rollercoaster day, the stock ended the frame close to where it began.
The initial IPO price was listed at $38 (all figures U.S.), and it eventually hit $45.
But when the markets closed, Facebook’s brand new stock was listed at $38.23 – just 0.6 per cent above the initial IPO price.
More than 420 million Facebook shares traded hands, with about 30 banks taking part in the frenzied trading.
After an approximately 30-minute delay, the company’s shares began changing hands at $42.05 around 11:30 a.m.
In the first hour of trading, 200 million shares were traded.
“We were told the demand for the shares was so strong, the Nasdaq could not match up the buy-and-sell orders in order to get the stock open at the scheduled time,” BNN’s Michael Kane said.
The record holder for the most IPO (initial public offering) shares sold in a single day is General Motors at 458 million in 2010.
Early investors in Facebook will hold about 241 million shares, while the company’s 28-year-old founder and CEO Mark Zuckerberg will retain 55.8 per cent of the voting stocks, and more than 18 per cent of the company’s value, Kane said.
In 2008, Facebook stock was sold to an internal group of investors for as little as $3.50 per share, he said.
Facebook and its investors had set an IPO price of US$38 Thursday. At that valuation, the company would have been worth $104 billion – enough to rank it as the most valuable company to ever go public.
Now that Facebook is a public company, it will subject to market forces that will base its value on quarterly profits.
Since its early days in a Harvard dormitory, Facebook has grown to boast of more than 900 million users logging on every month.
The company has become one of the few profitable online ventures with a net income of $205 million during the first three months of 2012, on revenue of $1.06 billion.
In 2011, the company earned $1 billion, up from $606 million a year earlier, a far cry from 2007 when the company reported a net loss of $138 million on revenue of $153 million.
That’s also a far cry from 2007 when it posted a net loss of $138 million and revenue of $153 million.
Facebook earns most of its money through advertising and also has a take on sales of online games such as Zynga’s “Farmville.”
Munro – Brampton
I think in a few years Facebook will not be as popular. I don’t use it as some US agency looks at all the data. One can build a huge database of personal information from all the things put on Facebook.
Mark
Okay, so all of this hype is about a ‘virtual’ business that has absolutely ZERO redeeming value apart from those who feel the need to share with their ‘friends’ their everyday activities, pictures and what is going on in their lives. This used to be called a ‘relationship. Now it is a forum whereby the bulk of the income for this ‘business’ is advertising. Again, there is ZERO substance and all style.It’s amazing how gullible the ‘me’ generation has become. Here’s an idea….Potash, Gold, companies that have some value. But alas, such things are not immediate and hence have no attraction to the “me’s”.Alas indeed…
Alain
Sorry for the typos lol
Warned ya, no shorting allowed yet, when opt chains open sell calls like no tomorrow
Warned ya
One word for potential investors; ” SHORT ” That is the only way you are going to make $$$ on this.
Alain
Heu guys, me again
Can’t believe some of you are defending $fb, the user count is way over stated, it’s nowhere near 8-900 million.. Maybe a fifth of that.. And the valuation is based on revenues derived from 6 ads o n a sidebar, which don’t even appear in mobile versions… When we Ste last time you clicked an ad on there? Anyway, yes, the site is a dream for marketers, but these guys net 200m in q112 on 1 billion? Excuse me. No… The bubble is clearly fined, and the momss are out in full force… Unlimited bid at 38 means this thing was manipulated to high hell.. Happy trading
Mark in Newmarket
If you ask me, Zuckerberg knows that FB is a fad and that fad is about to go on the downward trend. He’s selling shares to the public so he can get his money and get out while the goings good. I maybe wrong, but we’ll see in a year or so, time will tell but I am not going to buy this stock.
annoyed with FACBOOK!
And thus begins the end of the beloved “facebook”Facebook is one of the dumbest things that has ever been created, and I’m so sick of hearing about it!
Paul
Facebook value will continue to increase as long as people continue to publicly post their private information – that’s what Facebook will be selling to make money in future.
eddytoronto
The Manipulators held it up ….The FACEBOOK story is over 23 cents is all ..Expect this stock to tank on Monday…
Bob T
Facebook will be the next AOL . As soon as they try sell ads all over it people will lose interest .
Paul in Ajax
I am not buying into the Facebook Hype. Facebook has been on its way out of fashion for a while. I am sick of hearing about Facebook.
Ryan in AB
Need we ask how the internet stock bubble of the early ’90s got created? I think we have a prime example of how if you don’t learn from history you are doomed to repeat it.
dan
1 year and the stocks will be worth half or less
If memory serves me right Mr. Z stole the idea behind Facebook… It seems that theft pays off well for some – well apparently so until one day the playing field gets leveled. Facebook is for ‘knobs’ who like to look in the mirror and make faces….how bright is that, seriously??
Again?
My Chrystal balls tell me Zuckerman’s business plan has similarities to Madoff’s.
Mark Smith (Montreal, PQ)
Comments here are very short sighted and don’t understand the real value of Facebook. Hundreds of millions of people are sharing their opinions in one spot. Want to see how well a product is doing? Analyze facebook comments. You might find out that a product has better opinions in one region than another for example. You can also gain a lot of insight in how people actually use the product you made. What about government-related things? 10,000 people complain about flu symptoms in Hamilton within a week? Chances are there is a flu outbreak happening. There is so much value in the content generated by Facebook users and to dismiss that is extremely short sighted.
Alex
Let’s be realistic here: a company that makes 1 billion net profit per year is valued at 100 billion while McDonalds that makes close to 7 billion in annual profit, is valued at about the same. Also McDonalds has other things to back this up: manufacturing, distribution, restaurants. This in case things go wrong. What Facebook has to offer to investors in case things go bad? Data centers with servers that will be out of date in a year or two.Don’t get me wrong, Facebook has some value, but certainly is not 100 billion. I will be happy to see those people buying at 40-45 lose realistically about 75-80% of their investment.Like someone said it earlier: BUBBLE. And it’s gonna cost the economy again. People will never learn.
SaskMan
Ready ? Netscape
Alain
Jack R, I’ve got another:
BUBBLE
Jack R
One word to sum this up for people with more money than brains. Ready? Myspace.
Tags: news
One of the most anticipated IPOs in Wall Street history ended on a flat note, with Facebook’s stock closing at $38.23, up 23 cents from Thursday night’s pricing.
That meant the company founded in 2004 in a Harvard dorm room has a market value of about $105 billion, more than Amazon.com, McDonald’s and Silicon Valley icons Hewlett-Packard and Cisco.
It also gave 28-year-old CEO Mark Zuckerberg a stake worth $19,252,698,725.50.
“Going public is an important milestone in our history,” Zuckerberg said before he pushed a button that rang Nasdaq’s opening bell from company headquarters at 1 Hacker Way in Menlo Park, Calif. “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.”
___
In first meeting with Obama, French president sticks to early Afghan troop pullout timetable
WASHINGTON — In his first visit to the Oval Office, French President Francois Hollande declared he will withdraw all French combat troops from Afghanistan by year’s end, making clear to President Barack Obama the timeline for ending the U.S.-led war will not trump a campaign pledge that helped Hollande gain his new job.
Obama nodded along on Friday, knowing what was coming, but did not otherwise directly respond. Heading into a NATO summit on the course of the war and beyond, the White House has sought to emphasize the war coalition will remain firm even as nations pull back. And Hollande assured Obama that France was not out to cut and run.
“We will continue to support Afghanistan in a different way. Our support will take a different format,” Hollande said. “I’m pretty sure I will find the right means so that our allies can continue with their mission and at the same time I can comply to the promise I made to the French people.”
France’s declaration has significance far beyond its borders. Hollande’s move means France, one of the top contributors of troops to the war, will be removing the combat forces a full two years before the timeline agreed to by allies in the coalition. That could shift more of the burden to those allies and give them reason to hasten their own exit.
Hollande later told reporters that some “residual” number of France’s current 3,300 troops will remain in Afghanistan after this year to provide training and to bring home equipment. But he alluded to the reaction that France’s fast-track withdrawal may get from its NATO allies when they gather in Chicago Sunday and Monday.
___
Chicago protesters break away from nurses’ rally in prelude to bigger weekend demonstrations
CHICAGO — Hundreds of protesters broke away from a large rally and began marching through Chicago streets Friday, taunting police and shouting about everything from bank bailouts to nuclear power — a prelude to even bigger demonstrations expected after the start of a NATO summit.
Tags: news
17 May 2012
Last updated at 23:00 GMT
By Katie Hunt
Business reporter, BBC News, Hong Kong
Out with the old? Days of huddling around screens to get stock market news could be on the way out
These days we share most things online. Our photos, our social lives, our career histories.
The next step? Your stock market portfolio.
Continue reading the main story
- Special Report: The Technology of Business
- Angola beats most of Europe to 4G
- Can social influence sites be trusted?
- Can images stop data overload?
- 21st Century eureka moment
- Keep the social media cowboys at bay
At least, this is the hope of one newly launched Hong Kong online trading portal – 8 Securities – which is aiming to combine social media and stock investment to target Asia’s growing number of investors.
“We’ve built a platform that takes trading and social communication and merges it together,” says Mikaal Abdulla, the firm’s chief executive.
“It’s our own social network but you can also integrate it with your own external social network and publish your trades on Twitter, Facebook or LinkedIn,” he adds.
Social media is increasingly influencing the world of finance and investing. Some hedge funds use Twitter to capture investor sentiment on a given stock and some central banks use internet data to help them gauge economic conditions.
8 Securities’ approach to social media is different. It will allow users to see each other’s trades in real time, exchange ideas on instant messaging and follow or “friend” other traders in the community.
No relationship status here – the 8 Securities social network details trades and over financial activity
For example, says Mr Adbulla, if you bought Apple at $5 and sold it at $500, people will be able to see whether that’s true because your trades are posted automatically, making it more transparent than other online message boards and trading forums.
Some US-based online brokerages, such as Zecco, are treading a similar path, but Mr Abdulla says 8 Securities is unique in Asia.
Gateway to China
Eschewing Wall Street or The City, Mr Abdulla, a veteran of US online broker E*Trade, says Hong Kong was the natural place to launch the business.
The former British territory is home to the world’s seventh largest stock market and is also the gateway to China’s fast-developing financial markets.
Unlike markets in Europe and the US, where trading tends to be dominated by large financial institutions such as pension funds, Hong Kong has a thriving community of individual investors that frequently trade online.
Newspapers are full of trading tips and the nightly news always begins with the Hang Seng’s daily performance – the city’s equivalent of the FTSE 100.
Mikaal Abdulla says that Hong Kong was the natural place to launch an online trading portal
“I think for a city as small as it is, the market is very, very large,” says Mr Abdulla. “We looked at the competition, and unlike Europe and the US, it is quite traditional.”
According to the city’s stock exchange, Hong Kong has 1.8 million regular stock traders and 69% of these trade online.
But there are only a handful of pure, online trading portals and most internet trade takes place via bank websites, which Mr Abdulla says are expensive. Big-name US online brokers like Charles Schwab and E*Trade operate in the city but they only offer US stocks, he adds.
8 Securities also faces competition from Hong Kong’s old-school brokerage houses, where elderly clients congregate to drink tea and watch stock prices flicker on screens, but these are on the wane as technology savvy youngsters find stock tips elsewhere.
“It’s a tougher environment for brokers,” says Francis Lun, managing director of Lyncean Holdings. “We build up personal relationships but the new generation likes to trade online.”
Mr Abdulla says he hopes his social trading platform will create a buzz at the brokerage branch online.
High-risk
8 Securities is not the only online trading portal targeting Asia’s more adventurous investors. It’s a trend that’s likely to continue as austerity programmes bite in Europe and the US economy experiences a sluggish recovery.
Scoach, a German-Swiss electronic trading platform that specialises in derivative products, will launch in Hong Kong in July. It aims to take advantage of the local appetite for high-risk products such as stock warrants.
“The investment mentality in Asia seems to be more risk-tolerant than in Europe,” says Christian Reuss, Scoach’s chief executive. “Investors are willing to take greater risks for greater potential returns.”
Hong Kong’s appeal for these operators also lies in its status as a testbed for China’s potentially massive arena of stock market investors.
Asian investors take more risks than their European counterparts, says Scoach boss Christian Reuss
According to data compiled by 8 Securities, there are more than 30 million online stock trading accounts in Hong Kong and China, compared to around 20 million in the US and less than 10 million in Europe.
However, the controls Beijing places on the flow of money in and out of the country makes it very difficult for ordinary Chinese to buy and sell overseas stocks.
But for the upwardly mobile, one way around this has been to open a Hong Kong bank account, from where they can trade stocks worldwide. However, there are restrictions on how much money can be transferred from China into the account and vice versa.
Mr Abdulla estimates that one third of 8 Securities account holders are Chinese and its site can be integrated with Sina Weibo – a social network that is widely used in China, where Facebook and Twitter are blocked.
In particular, he says, Chinese investors like the liquidity and transparency of US markets and are interested in blue-chip US tech stocks like Apple, Microsoft and Google. He expects Facebook’s upcoming IPO to be particularly popular.
“Hong Kong is the natural point for them to trade foreign markets,” he says. “It’s really their only option.”
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– Yelp Inc., developer of online games, first day of trading on March 2, 2012
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It’s a big windfall for a company that began eight years ago with no way to make money.
Facebook priced its IPO at $38 per share on Thursday, at the high end of expectations. The IPO values Facebook higher than Amazon.com and other well-known companies such as Kraft, Disney and McDonald’s.
Facebook’s stock is expected to begin trading on the Nasdaq Stock Market sometime Friday morning under the ticker symbol “FB.” That’s when so-called retail investors can try to buy the stock.
Facebook’s offering is the culmination of a year’s worth of Internet IPOs that began last May with trailblazer LinkedIn Corp. Since then, a string startups focused on the social side of the Web have gone public, with varying degrees of success. It all led up to Facebook, the company that’s come to define social networking.
“They could have gone public in 2009 at a much lower price,” said Nick Einhorn, research analyst at IPO investment advisory firm Renaissance Capital. “They waited as long as they could to go public, so it makes sense that it’s a very large offering.”
Facebook Inc. is the third-highest valued company to ever go public, according to data from Dealogic, a financial data provider. Only the two Chinese banks have been worth more. At $16 billion, the size of the IPO is the third-largest for a U.S. company. The largest U.S. IPO is Visa, which raised $17.86 billion in 2008. No. 2 is power company Enel and No. 4 is General Motors, according to Renaissance Capital.
The $38 is the price at which the investment banks orchestrating the offering will sell the stock to their clients. If extra shares reserved to cover additional demand are sold as part of the transaction, Facebook Inc. and its early investors stand to reap as much as $18.4 billion from the offering.
For the Harvard-born company that reimagined online communication, the stock sale means more money to build on the features and services it offers its 900 million global users. It means an infusion of funds to hire the best engineers to work at its sprawling Menlo Park, Calif., headquarters, or in New York City, where it opened an engineering office last year.
And it means early investors, who took a chance seeding the young social network with start-up funds six, seven and eight years ago, can reap big rewards. Peter Thiel, the venture capitalist who sits on Facebook’s board of directors, invested $500,000 in the company back in 2004. He’s selling nearly 17 million of his shares in the IPO, which means he’ll get some $640 million.
The offering values Facebook, whose 2011 revenue was $3.7 billion, at as much as $104 billion. The sky-high valuation has its skeptics, who worry about signs of a slowdown and Facebook’s ability to grow in the mobile space when it was created with desktop computers in mind. Rival Google Inc., whose revenue stood at $38 billion last year, has a market capitalization of $207 billion.
“There seems to be somewhat of a hype around the stock offering,” says Gartner analyst Brian Blau.
That, of course, is an understatement.
Facebook’s IPO dominated media coverage in the weeks and days leading up to the event. Zuckerberg’s hoodie made headlines as did General Motors’ decision to stop advertising on the site _and rival Ford’s affirmation that its Facebook ads have been effective.
There are a few reasons for the exuberance. First, there’s Facebook’s sheer size and high profile. The company grew from a college-only social network created in Zuckerberg’s dorm room at Harvard in 2004 to an Internet phenomenon embraced by legions of people, from teenagers to grandmothers to pro-democracy activists in the Middle East.
Secondly, it’s personal.
“It’s probably one of the first times there has been an IPO where everyone sort of has a stake in the outcome,” Blau says. While most Facebook users won’t see a penny from the offering, they are all intimately familiar with the company, so it resonates as something they understand.
And then there’s CEO Mark Zuckerberg, who turned 28 on Monday. He has emerged as the latest in a lineage of Silicon Valley prodigies who are alternately hailed for pushing the world in new directions and reviled for overstepping their bounds. He counted the late Apple CEO Steve Jobs among his mentors and he became one of the world’s youngest billionaires _ at least on paper _ well before Facebook went public. A dramatized version of Facebook’s founding was the subject of a Hollywood movie that won three Academy Awards last year, propelling Zuckerberg even further into the public spotlight.
Though Zuckerberg is selling about 30 million shares, he will remain Facebook’s largest shareholder. He set up two classes of Facebook stock, building on the model Google co-founders Larry Page and Sergey Brin created as part of the online search leader’s 2004 IPO. The dual class structure helps to ensure that he and other executives keep control as the sometimes conflicting demands of Wall Street exert new pressures on the company.
As a result, with the help of early investors who’ve promised to vote their stock his way, Zuckerberg will have the final say on how nearly 56 percent of Facebook’s stock votes.
True to form, Zuckerberg and Facebook’s engineers are ringing in the IPO on their own terms. The company is holding an overnight “hackathon” Thursday, where engineers stay up writing programming code to come up with new features for the site. On Friday morning, Zuckerberg will ring the Nasdaq opening bell from Facebook’s headquarters.
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Follow Barbara Ortutay on Twitter at http://twitter.com/BarbaraOrtutay
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Christopher Nagy, head of order routing for TD Ameritrade Holding Corp. (AMTD), plans to depart the retail brokerage firm at the end of this month to set up a new consulting venture, he said Wednesday.
Nagy said he plans to launch KOR Trading, a new firm …
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