FB now a USD 100 bn company
New York: Social networking site Facebook, whose 900 million user strength is only behind China and India`s populations, went public today as its much sought- after shares got listed at Nasdaq and the stock is trading at USD 41.10, much above its IPO price of USD 38 in early trade.
What began in a Harvard dorm room as a platform to connect college mates in US eight years ago, Facebook today is valued at 109.36 billion after it raised a whopping USD 16 billion in a much-trumpetted IPO (Initial Public Offer) billed as America`s second-largest ever, eclipsing the likes of General Motors and Citigroup.
The market potential of Facebook is reflected in the fact that its founder Mark Zuckerberg, still in his twenties, and his team was able to mop up billions of dollars at a time when US is recovering from a painful recession and investors worldwide are staying away from risky assets like stocks.
Earlier in the day, Zuckerberg in a symbolic gesture rang the opening bell at Nasdaq, an exclusive bourse for technology companies like Microsoft and Google, marking the listing of Facebook under the ticker symbol `FB`.
Investor appetite for FB shares was mirrored in the listing price of USD 42 apiece, 10 per cent more than the IPO offer price of USD 38. To mark the IPO, Facebook is expected to organise an "hackathon" where engineers stay up all night writing programming code to come up with new features for the site.
Facebook put up 421 million shares of its common stock up for sale. The company has also granted the underwriters a 30-day option to purchase up to 63,185,042 additional shares to cover over-allotments, if any. With the over-allotment quota, the total IPO mop up could touch USD 18 billion.
Facebook had roped in Morgan Stanley, J P Morgan, Goldman Sachs, Bank of America Merrill Lynch, Citigroup and Deutsche Bank Securities to serve as book runners for the IPO.
In the first few minutes of trading, FB share price was up in the range of 5-8 per cent trading between USD 40-42. According to Nasdaq data, in the initial few minutes of opening, over 194 million Facebook shares exchanged hands.
The listing was, however marked by a glitch that caused a minor delay. Nasdaq had targeted to begin trading FB stocks at 11:05 am but traders were having trouble changing or cancelling orders they had submitted to Nasdaq`s queue starting at 7:30 am. It finally started trading at 11:30 am.
Earlier in the day, Zuckerberg surrounded by hundreds of Facebook employees including COO Sheryl Sandberg, pressed a button on a glass podium to start the trading day.
Nasdaq`s chequered blue facade welcomed its newest member with the message `Welcome Facebook` and flashed the images of Zuckerberg ringing the opening bell.
People gathered outside Nasdaq`s busy street on Times Square took pictures of the stock exchange`s giant front screen.
A visibly elated Zuckerberg signed the glass podium as hundreds of Facebook employees clapped and cheered the historic moment for the company, which was founded by then 20-year old Zuckerberg in his Harvard dorm room in 2004.
With a market value of over USD 106 billion, Facebook is among the most valuable US companies, ahead of sector giants Amazon (USD 98 billion) and Cisco (USD 89 billion). But it remains behind fellow technology giants like Google (USD 203 billion) and Apple (USD 495 billion).