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 Here are some highlights of the day, as gathered by reporters from
The Associated Press:
STATUS UPDATE
On Mark Zuckerberg's Facebook page, under recent activity, was this,
posted shortly after 9:30 a.m. EDT:
"Mark listed FB on NASDAQ."
STAT CHECK
Facebook closed at $38.23, a gain of 23 cents, or 0.61 percent.
About 570 million shares were traded on its first day as a public
company. For perspective, that is roughly equal to the combined
trading volume of 28 of the 30 stocks in the Dow Jones industrial
average -- every Dow stock except Bank of America and JPMorgan Chase.
"LIKE KISSING YOUR SISTER"
All that excitement for 23 cents. And it took a rush of buyers in
the final minutes to achieve even that. Facebook was hugging the $38
mark for much of the final hour of trading.
In theory, closing near the IPO price is good. It means that the
banks that took the company public judged demand almost perfectly,
and got the most money possible for selling stockholders.
But in practice, it's bad: The institutions that buy from the
sellers -- typically big investors like hedge funds, mutual funds and
pension funds -- have come to expect big profits on the first day.
"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."
--Bernard Condon, AP Business Writer
THE EARLY INVESTOR
Alper Aydinoglu, a student at DePaul University in Chicago, got 50
shares via Etrade at $38, the offering price. He said that he was
"disappointed with the first day of trading."
His gain on paper: $11.50.
And that was before Etrade's standard commission of $9.99.
He called it an excellent learning opportunity, though. "On top of
everything," he added, "I now have the bragging rights that I
participated in one of the most popular IPOs of all time."
--Pallavi Gogoi, AP Business Writer
VIEW FROM THE NASDAQ
In Times Square, home of the Nasdaq, people took pictures of the
giant Nasdaq billboard, which featured the Facebook logo. Some were
"checking in" to the Nasdaq on Facebook.
As they waited for Facebook stock to start trading, people huddled
outside the windows of the Nasdaq site holding up cellphones and
cameras to take pictures of the first price change.
Nasdaq is an electronic market, and the site is a TV studio
featuring monitors with constantly changing stock prices.
Frederick Nolde, 31, of Richmond, Va., was in New York for meetings
and said that he bought 100 shares of Facebook through Etrade. He
thinks the company is worth $100 billion, but he said the real
question is how Facebook performs with mobile users.
"If they can figure that out, they'll do well," he said.
Dennis Hitchings, a retiree from Columbus, Ohio, said that he did
not think Facebook is worth $100 billion -- "They don't have the
revenue" -- but he did say he would buy the stock at $38.
--Joseph Pisani, AP Business Writer
ABOUT THAT $38 FLOOR
For most of the last half-hour of trading, Facebook was at, or
pennies above, the offering price of $38 per share. But it never
traded at $37.99, or at any other price that would have put it in
the red for the first day.
No coincidence, said Jay Ritter, a finance professor at the
University of Florida: The banks that underwrote the IPO put in
enough "buy" orders at $38 to keep the price from dropping below
that level.
Underwriters are allowed under regulatory rules to buy back, for 30
days, a certain amount of the shares they sell on the open market.
Ritter said that his research showed 9 percent of IPOs close at
exactly the offering price on the first day, 16 percent of IPOs
fall, and 75 percent increase in value.
Facebook made it into the "increase" category, but just barely.
--Pallavi Gogoi, AP Business Writer
ZUCK: DOING THE MATH
The closing stock price of $38.23, multiplied by a holding of
503,601,850 shares, gives CEO Mark Zuckerberg a stake worth
$19,252,698,725.
And 50 cents.
In Menlo Park., Calif., Zuckerberg addressed Facebook employees
Friday morning and said: "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."
MAD MONEY
Earlier this week, Mad magazine imagined a Facebook stock
certificate, complete with a photo of Mark Zuckerberg smiling from
inside an oval, like George Washington on the dollar bill.
"Thank you for funding our ongoing effort to collect and control
every single piece of personal information on the Internet," the
certificate said. "Every photograph, every song, every social cause,
every event listing, every opinion, every breathless description of
a recently eaten pulled-pork sandwich."
Facebook is drifting back toward its offering price of $38. It's up
just 10 cents for the day now as volume nears half a billion shares.
THE RUSH FROM SMALL INVESTORS
TD Ameritrade, the online brokerage, reported that in the first 45
minutes that Facebook was trading, it 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 overall
trades on TD Ameritrade. For the LinkedIn IPO, in May 2011, the
figure was 5 percent.
Steve Quirk, who oversees trading strategy at TD Ameritrade, said
that about 60,000 orders were lined up before Facebook opened.
"The volume has been unbelievable even though the stock hasn't moved
dramatically," Quirk said. "It's a hot topic in our chat rooms, and
most people expected to see the stock move more than it has."
--Pallavi Gogoi, AP Business Writer
BUT SERIOUSLY, FOLKS
Twitter users were joking about the Facebook IPO.
From Conan O'Brien: "Today, Facebook went public, just as MySpace's
last user went private."
And from the Twitter feed of the website Someecards: "My favorite
Facebook public offerings are still your beach photos."
--Peter Svensson, AP Technology Writer
CALIFORNIA DREAMING
Gov. Jerry Brown of California must not have seen "The Social
Network."
In an appearance on "CBS This Morning," Brown said that his state is
the land of innovation and that it was where Facebook was invented.
He added: "Not in Texas, not in Arizona, not in Manhattan and
certainly not, you know, under the White House or the Congress."
But interviewer Charlie Rose pointed out that CEO Mark Zuckerberg
and others developed the site at Harvard University, all the way
across the country in Cambridge, Mass.
Brown responded that the Facebook inventors quickly came to
California, "where all the other innovative people are."
--Juliet Williams, AP Sacramento bureau
WE ARE THE ONE-QUARTER PERCENT
Conversations about the Facebook IPO accounted for 0.25 percent of
all online discussion during the first part of the workday, until
about 1 p.m., according to NM Incite, a company that tracks social
media traffic.
That may sound small, but it's an increase of 5,000 percent compared
with the buzz about the Facebook IPO a month ago. It is also four
times greater than the chatter for the LinkedIn IPO and 10 times
greater than the Groupon IPO.
--Scott Mayerowitz, AP Business Writer
[to top of second column] |
EXPERIENCING THE FACEBOOK IPO ON FACEBOOK
Facebook's IPO has Wall Street abuzz. But what about Facebook's 900
million users?
Some were debating whether they should get in on the buying frenzy.
Others were guessing the closing price. Several were lamenting that
they hadn't thought to invent the social media site themselves.
A few treated even the company like a person, congratulating it on
the public offering as they might a friend on the birth of a child.
"Hey Facebook! Have a good first day on the stock market," a
swimming pool maintenance and repairman from Petaluma, Calif., wrote
from a mobile device. Within two hours, eight other Facebook users
had "liked" the post.
Not all Facebook users were obsessed with the company's entrance to
the stock market. The went along with their everyday lives, posting
photos of drunken debauchery that they might one day regret,
weighting in on the presidential election, celebrating Haitian flag
day or just welcoming the start of the weekend.
--Scott Mayerowitz, AP Business Writer
POP CULTURE
Francis Gaskins, president of IPOdesktop, a market research company,
said that it wasn't a bad thing that Facebook didn't get a "pop" on
its first day similar to what happened during the 1990s dot-com
frenzy.
He said that most tech companies going public want a big rise in
their debut to show they're "strong, dynamic companies standing out
in the crowd" but that Facebook already has that image, and so may
not care.
Gaskins said that the banks taking Facebook public have learned from
the IPOs of social media companies in the past year and are better
able to gauge demand and supply for a new stock.
--Bernard Condon, AP Business Writer
THE OUTSIDER'S VIEW
"I'm part of the 99 percent. I don't buy stock shares," Jerry Urban
said as he waited for a bus in Baltimore. "I wish them good luck.
Tell them to stop selling my information."
Facebook stock is at about $40.50, or $2.50 higher than its offering
price.
--Alex Dominguez, AP Baltimore bureau
TILL THURSDAY
Bruno del Ama, the CEO of asset management firm Global X Funds, said
that he will wait five full trading days, until after the market
closes Thursday, to get in on Facebook.
"On the first day you see a tremendous amount of volatility," he
said. By the fifth day, investors should see more stability, he
said.
He believes Facebook is here to stay: "Once companies have built a
network, it's really difficult to displace them," he said. He added
that while massive companies such as Google are trying to compete
with Facebook, and may even have better technology, "we care about
where our friends are."
--Barbara Ortutay, AP Technology Writer
A WARNING FROM GERMANY
A German data protection official warned Facebook investors that the
site's $38 starting share price is based on practices that may
breach European privacy rules.
Thilo Weichert, data protection commissioner for the northern German
state of Schleswig-Holstein, said shareholders should be aware that
if European privacy authorities have their way, "Facebook's business
model will implode."
Weichert was quoted by German daily Frankfurter Allgemeine Zeitung
on Friday saying Facebook could be ordered to stop transferring user
information to the United States.
Facebook's IPO prospectus warns investors that its business is
subject to "complex and evolving U.S. and foreign laws and
regulations regarding privacy, data protection, and other matters"
that could harm its business.
SOME PERSPECTIVE ON MARKET VALUE
The IPO price valued Facebook at $104 billion. By comparison, here
are the top five companies in the Standard & Poor's 500 index by
market value, based on Friday's closing stock prices:
-
Apple, $496 billion
-
Exxon Mobil, $381 billion
-
Microsoft, $245 billion
-
IBM, $227 billion
-
Wal-Mart Stores, $212 billion
--Seth Sutel, AP Business Writer
THE RIPPLE EFFECT: CALIFORNIA CASH
Besides minting Internet billionaires, the Facebook IPO should
provide a little help for the cash-starved state of California.
The state's nonpartisan Legislative Analyst's Office says the IPO
will generate $1.6 billion to $2.6 billion for the state through the
middle of next year as shareholders cash in their stock.
California badly needs the money: Gov. Jerry Brown said over the
weekend that the projected state deficit has swelled to $15.7
billion for the coming fiscal year. In January, it was projected at
$9.2 billion.
A FUND MANAGER WEIGHS IN
Chris Brown, manager of the Pax World Balanced mutual fund, made a
roughly $14 million investment when his $1.9 billion fund acquired
private shares of Facebook on a secondary market before the IPO.
As shares traded for about $40 at midday Friday, Brown said the rise
from the stock's $38 opening price was unsurprising.
"Going into the IPO, there has been a lot of skepticism from
investors, in particular institutional investors, questioning
anything from whether the price of the stock is fair, to whether
Facebook can successfully monetize and sell ads," he said.
"We're long-term investors. It's nice to have the stock up for one
day, but it's only one day. It's hard to extrapolate much as to the
future of the company."
In coming days, Brown expects plenty of ups and downs for the stock,
as investors assess a company whose prospects are hard to pin down
because of its evolving business model.
"You're going to see obviously an extreme amount of volatility over
the next week as people evaluate the stock," Brown said.
--Mark Jewell, AP Personal Finance Writer
A BANKER WEIGHS IN
Blessing Oguguam of Nashville, Tenn., a vice president in business
banking for Wells Fargo who has worked in commercial lending for 15
years, said he was not comfortable buying Facebook stock:
"I'm thinking it's great for now. But 10 years from now, is that
crave still going to be there? So if I go ahead and invest now, I
know Facebook is not producing any product. It's just a social media
site. So in 10 years to come, if this hype dies down, then what
happens to my investment?"
--Lucas L. Johnson II, AP Nashville bureau
TEACHABLE MOMENT
As Facebook hovered near its $38 offering price toward the end of
the day, Ann Sherman, an IPO expert and associate finance professor
at DePaul University, said that even the best stocks can be
over-hyped.
Sherman added: "From now on, I'll be able to use Facebook as the
perfect example of what I tell the students in my IPO and venture
capital class -- that even apparently hot IPOs can be risky to price,
and that no company can perfectly control the timing of their
offering."
[Associated
Press]
Copyright 2012 The Associated
Press. All rights reserved. This material may not be published,
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