Facebook shares are trading publicly for the first time ever today, and so far, we’re seeing small fluctuations in share price.
As of 11:30 Eastern time, trading had commenced at $42. Throughout the mornings, shares traded between $40 and $41. Highs and lows for the day are so far at $43.02 (a 13 percent increase from the original asking price of $38) and $38.
UPDATE: Facebook shares closed at $38.37, down from its $42 opening price.
Analysts expect the price to remain in the low to mid-$40s throughout the rest of the day. Trading was expected to begin as early as 10:45 am Eastern Time but was delayed, likely due to the large volume of orders.
The eight-year-old company has offered 421.2 million shares today, bringing the deal’s total to slightly more than $16 billion with a market value between $93 billion and $104 billion.
Expected revenues for 2012 are $4 billion, with a $972 million net income, according to NASDAQ.
Facebook CEO Mark Zuckerberg chose to ring the bell remotely from his company’s Menlo Park, Calif., campus, where VentureBeat was on hand to get news and on-the-spot reactions — a welcome wave of verifiable narrative after several months of rampant speculation.
Hype be damned, this is the Big One
“The days leading to the IPO have been colored by an assemblage of facts, opinions, and rumors, from Mark Zuckerberg’s hoodie to the dampening effect of mobile growth on ad revenues,” said Gartner analyst Ray Valdez in a recent conversation with VentureBeat.
During the company’s quiet period between its S-1 filing and today, any actions or announcements from the company have indeed taken on added import, with the upcoming IPO throwing a long shadow over Facebook’s activities and subsequent media coverage.
“In aggregate, these ‘man-bites-dog’ stories serve to temper the early, somewhat irrational, exuberance around the IPO, which is likely a good thing for all concerned,” Valdez continued.
“Even if Facebook’s IPO comes in at the low end of the price range, it will have made history.”
History, indeed. Even at its starting price, Facebook has already broken three records, a fact that’s supported by statistics from NASDAQ. Here are a couple of charts we made to show Facebook’s place in IPO history across all global stock exchanges as well as U.S. stock markets.
Moreover, Facebook dwarfs other Internet IPOs, both from this bubble and the last. Today’s deal is about 10 times larger than Google’s 2004 initial public offering, according to NASDAQ’s stats. It’s 16 times bigger than Zynga’s IPO and more than 20 times the size of Groupon’s.
Now, all we have to do is wait and watch as Facebook shares begin rising (and inevitably falling) on the stormy seas of the stock exchange floor. The question on everyone’s minds: Where will Facebook shares be trading at the closing bell?
Don’t expect a “pop”
“This is now a $16 billion float — that is a ton of stock — so it’s unlikely that the stock will double like LinkedIn did,” said Michael Pachter, managing director for equity research at Wedbush Securities.
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He continued to state that a “pop” only happens when stock is priced too low to begin with.
“I’m sure Facebook’s IPO will be well-received, but don’t expect the stock to go quite that high… I would expect the stock to be solidly in the mid-40s, as that’s where the private market was.”
Mark Siegel, managing partner at Menlo Ventures, agrees that the $38 starting point isn’t leaving too much money on the table.
“I think it’s going to be priced to perfection quite efficiently,” he told us, stating that the $38 price point “certainly fully values the company based on today’s financial metrics.”
While all parties involved acknowledge that the hype and drama surrounding Facebook has led to rabid investor interest and an oversubscribed initial offering, no one thinks there will be a LinkedIn-like “feeding frenzy,” as Dunn & Bradstreet industry expert Lee Simmons put it.
“Google’s shares rose 18 percent on its opening day, and LinkedIn jumped 109 percent. But LinkedIn floated less than 10 percent of its shares,” the analyst pointed out. “The combination of Facebook’s comparatively large share offering and its increased price range indicates to me that its opening day will be less ripe for the proverbial pop.”
“Still, the day you see your company stock symbol moving across the ticker is one you never forget.”
On the eve of Facebook’s historic IPO, serial entrepreneur Scott Sellers reminisced about his own experiences in this department, saying, “Facebook going public will have a profound impact on Silicon Valley.”
Top image courtesy of Jolie O’Dell, Flickr