The historic day came and went as Facebook, eight years-old, with more than 901 million members, roughly 1 in 8 people on Earth, went public, issuing actual stock certificates in a retro move. As of 3:07 pm EST, Facebook had traded 460 million shares, setting a record for trading volume for a U.S. stock the day of its IPO. Facebook's stock opened around $43 and quickly slipped to under $39, after pricing on Thursday at $38 a share.
The social giant chose Nasdaq over NYSE Euronext, not surprising as the former is more closely associated with Silicon Valley. Due to a technical delay at Nasdaq caused by the sheer volume of share orders which began at 10:45 am EST, the stock opening took place at 11:30 am instead of 11:00 am, with some 82 million shares traded in the first 30 seconds. Seven minutes after the opening, 110 million shares had traded, with the stock eventually reaching a high of $45 a share. All in all, the highly anticipated public debut proved more of a whimper than the bang that was expected.
As the Wall Street Journal reported, "The debut was marred by a 30-minute delay in the opening of the shares, coupled with reports from traders about lack of communication about orders. That threatened to dent the reputation of Nasdaq, operator of the Nasdaq Stock Market, which competed aggressively with the New York Stock Exchange for the chance to list the deal."
Thirty-one banks were involved with the public offering, with the main players Morgan Stanley (38%), JPMorgan (20%), Goldman Sachs (15%), Bank of America, Barclays and Allen & Company.
The expected raise is around $16 billion, making it the largest Internet-related IPO on record, breaking the previous record held by Infineon Technologies AG (Germany), which raised $5.9 billion in March 2000.
The offering is the second-largest in U.S. history, ranking just ahead of General Motors' 2010 IPO, which raised $15.8 billion, and behind Visa's $17.9 billion deal in 2008.
Investors jumped in at the bell, but normal traders are advised to wait a couple of days for the stock price to settle back down. On offer are 180,000,000 shares of Class A common stock and selling stockholders are offering 241,233,615 shares of Class A common stock. Closing is expected on May 22, 2012.
Facebook had total revenues of $3.8 billion in 2011, with an operating profit of $1.5 billion. The big financial winners from the IPO are Facebook, with about $5.6 billion of the roughly $10.6 billion it plans to raise, while the other half goes to inside investors including co-founder and CEO Mark Zuckerberg, venture firm Accel Partners, early investor and PayPal co-founder Peter Thiel, Russian tycoon Yuri Milner's DST and investment bank Goldman Sachs.
Zuckerberg is now one of the 25 richest people on Earth; his net worth is $20.8 billion, placing him 23rd on the Bloomberg Billionaires Index, ahead of Amazon.com Inc.'s Jeff Bezos. (WSJ.com's real-time Zuckerberg wealth tracker proved a huge hit.)
And now comes the biggest challenge yet for Zuckerberg as he faces the glare of public scrutiny; there will be investors to answer to and satisfy and securities laws to comply with, in addition to figuring out China, monetization and other hurdles. Critics such as the Altimeter Group suggest that Zuckerberg's track record as a "Go away, I'm working on it" recluse could prove detrimental as he has to face investors on quarterly earnings calls going forward.
“For now, the history of IPO performance hasn't dampened the excitement of retail investors, who are treating Facebook's launch today more as a touchstone cultural event than a stock offering,” notes CBS News. “But as illustrated by Yahoo's woes as well as the demise of Netscape, which was bought by AOL in 1998, the corporate graveyard is full of companies that shined for a while before succumbing to mismanagement, technology shifts, and changing sensibilities.”
Proving to be bigger news on Twitter today, ironically, FB (the stock ticker it's now trading under) was hoisted on its own timeline — which wasn't updated today, (Zuckerberg updated his Facebook page twice in May, one time — below — for today's IPO). To be fair, they've been a little distracted in Menlo Park these past few weeks.
Now the world waits to see just how much ‘Like’ there is for the social giant that has defined social media with nearly half a billion people worldwide logging in every day.