Aiming High Out the Gate
Facebook last night announced that it would start its stock at the top of its range, going for $38 a share. This morning, it opens on the NASDAQ exchange under that ticker "FB" and having added more shares to the offering to satisfy demand. That values the company at some $104 billion dollars overall.
While the company creates new products and features to satisfy its new shareholders, it is already looking at an advertising backlash and political shenanigans over one of its main backers. We'll have more news at the opening bell to see investor's reaction on what looks like a rather choppy day for stock markets.
WIll continued European woes cast a shadow over what should be a great day for Mark Zuckerberg (who will become one of the top 30 richest people on Earth (on paper), and company, we'll find out soon.
The Opening Bell
Reaction will appear here when the stock starts trading... Mark Zuckerberg is due to ring the opening bell on the trading floor, remotely from California, you can watch the event live on nasdaq.com at 9:20 a.m. - 9:35 a.m. ET.
On NASDAQ's Facebook page (naturally) there's a picture of the scene that will await traders, as if they needed reminding. This IPO rates as the third biggest IPO in America after VISA and General Motors.
The talk is all about how Facebook can generate the revenue to justify that price tag and what it will do if other advertisers start to leave the company.
Mark Zuckerberg in front of his company offices, has rung the bell for the start of trading, but Facebook's own stock doesn't start trading until 11AM EST, as its a new addition to the exchange.
Reports from German exchanges suggest there are some bids for at around $78 a share, more than doubling the starting price. Bids of various levels can be placed before trading, and these might just be some initial exuberance, or from banks trying to goose the market. It will be interesting to see what the first offers will be for shares, but expect the volume to be off the charts.
Tale of the Tape
First estimates from U.S. traders seem to be around $60 a share. In related news, Bono stands to become ever richer as MTV reports he has a 2% stake in Facebook (now where does he pay his taxes?)
And here comes the money shot, as Facebook becomes another commodity on the market. First price (of a trade where a buyer and seller are in agreement via the automated trading systems) shows $42 which would be classified as a "sensible" start.
UPDATE: Message from NASDAQ, Five minute (now 20 minutes) delay in Facebook trading, guess things are pretty busy with their systems. Finally, after a half hour delay, things got rolling and Facebook share started trading at around $42, before a spike to $43 and now settling down at around $41. Follow the action live on Google's Finance pages. Some 82 million Facebook shares were traded in the first 30 seconds of action.
Having spent most of the day, apart from a brief dip, averaging around 6% up on the day, in late trading, the stock slid back to exactly the $38 mark where it started and seems stuck there, barring any last-minute rallies, as the markets close for the weekend.