Facebook IPO: Live Updates On FB's Big Day

Eight years, 900 million users, and several Winklevoss lawsuits later, Facebook went public in the third largest IPO in history. Despite months of hype, it got off to a rocky start.

The social network raised more than $18 billion, putting the company's total market value at $104 billion. By comparison, Google raised $1.67 billion in its 2004 IPO, which valued the company at $26.4 billion.

But the stock's first trading day was anything but smooth. After an unexpected delay due to an overwhelming surge of orders, the stock finally started trading on the Nasdaq at around 11:35 a.m. ET, with the ticker symbol "FB." It jumped briefly to $43 a share, but then tumbled alarmingly back to its initial public offering price of $38.

The record will show that Facebook stock ended its first day of trading at $38.23, a gain of 23 cents above its IPO price. What it won't show is the unbelievable effort by its underwriters to hold the stock price above the $38 level for a huge part of the day.

Just take a look at the chart, posted by Josh Brown at The Reformed Broker blog. The stock price improbably held right at $38 for most of the entire final hour of trading, and it briefly touched $38 early in its first minutes of trading. Like a pilot at the controls of a jumbo jet that's lost three engines and its autopilot, the underwriters -- including Morgan Stanley and JPMorgan Chase -- wrestled and sweated to keep the stock at altitude.

That's not a great sign for the stock's future, according to research firm PrivCap, which believes it should have been priced lower. In a research note, PrivCap wrote:

The very presence of a supporting bid augurs poorly for Facebook stock, indicating the "pent up demand" was mostly wiped out whenFacebook increased the IPO size by 25% in the last 2 days,” said PrivCo CEO and Founder Sam Hamadeh from the NASDAQ marketsite earlier today.

Nonetheless, all those people who were supposed to get rich on the IPO? They are no less rich as a result of today's shaky action. The underwriters did their jobs for Mark Zuckerberg et al. in that respect.

-- Mark Gongloff

Watch live streaming video from nasdaq at livestream.com

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Facebook Makes New Acquisition

Facebook has just purchased mobile gifting service Karma.

"The service that Karma provides will continue to operate in full force," wrote Karma co-founders Karma Co-founders Lee & Ben. "By combining the incredible passion of our community with Facebook’s platform we can delight users in new and meaningful ways. As we say … only good things will follow."

More here.

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Recap

From the AP:

The stock opened at 11:32 a.m. at $42.05, but soon dipped to $38.01. By noon, it was up again at $40.40, a 6 percent increase. It fluttered throughout the afternoon, but it never hit the double-digit jump that many Facebook-watchers had expected. By the end of the day, more than 500 million shares had changed hands

The closing price means Facebook is worth about $105 billion, more than Amazon.com, McDonalds and storied Silicon Valley icons Hewlett-Packard and Cisco.

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Another Record

Breaking: Facebook's volume crosses 500M shares; only IPO to see 500M shares traded on first day of trading. #FacebookIPO

— CNBC (@CNBC) May 18, 2012

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The Price Is Right

Facebook closes at $38.37, only $0.37 above its offering price.

via AlThingsD

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Fizzling...

And Facebook dips back down to $38. theverge.com/2012/5/18/3028…

— Joshua Topolsky (@joshuatopolsky) May 18, 2012

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A New Record

@ WSJ : Facebook traded 460 million shares by 3:07pm ET, the most ever for a US stock the day of its IPO. http://t.co/KDNbZxeL

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Facebook Gets Its Very First 'Sell Rating'

Aww, look at that: Facebook shares have their very first "sell rating" from a Wall Street analyst.

Brian Wieser of Pivotal Research Group wasted little time in slapping a "sell" recommendation and a $30 price target on Facebook, which was recently trading at less than $39 a share, up a buck from its IPO price. Not a rip-roaring start for Zuck & Co., and Wieser thinks it will get worse, at least in the short term:

While we consider ourselves optimistic on the company’s underlying business opportunity and regard its prospects for durable success as favorable, we view shares as being “priced for perfection."

-- Mark Gongloff

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Seismic Activity At The Podium?

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A Feminist Reminder

The figure of the day is "$100 billion." But activist Shaunna Thomas notes you shouldn't forget about "0" -- the number of women on Facebook's board.

Thomas, co-founder of women's advocacy group Ultraviolet, which organized a protest at Facebook's New York headquarters last month, said in a statement:

Today, as Wall Street, the media and entrepreneurs around the world watch with great interest the historic Facebook IPO one story that has not gotten much attention is that while many will make millions today, women will not have a seat at the table. Literally. Facebook does not have a single woman on their board. The fact that a company as large as Facebook with a massive global reach does not have a single woman on their board is nothing short of shameful. We will continue our campaign to get women on the Facebook board because in 2012 no company with the massive global reach of Facebook should shut women out of the board room.

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Zuckerberg Is Now Richer Than Google Founders

Today's Facebook IPO has made Zuckerberg the 29th richest person in the world, according to Bloomberg.

At $38 a share, Zuckerberg's 503.6 million shares and options are valued at $19.1 billion, surpassing the wealth of Google Inc. co- founders Sergey Brin and Larry Page.

“Zuckerberg doesn’t think about his wealth,” David Kirkpatrick, author of “The Facebook Effect,” a history of the company, said in an interview on May 17. “This is a huge success for everybody. There’s no way it can be seen otherwise.”

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A Stark Contrast

#socialmediabubble MT @TMFHousel The average company with a market cap of $90-$100 billion has revenue of $77 billion. Facebook: $4 billion.

— Corbin Hiar (@CorbinHiar) May 18, 2012

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Cartoon Zuckerberg Sheds Blood On Wall Street

This amusing NMA.TV animation depicts a blonde Mark Zuckerberg riding the stock exchange bull through Wall Street, spearing investors with the horns, as well as 'Goldman Sachs' shaking the pennies out of the pockets of a widow.

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What Facebook's Future Holds: Getting You To Pay

Zuckerberg vowed that Facebook is and always will be free. But that doesn't mean you won't start paying the social network: the company is now plotting how to turn its users into customers, experts say.

HuffPostTech's Bianca Bosker reports,

Users will find themselves paying Facebook in the near future -- not necessarily to use the service, but to promote their posts, pay for apps, subscribe to magazines, or even refresh their wardrobe. Having opened their lives to Facebook, users may soon open their wallets to the social network, too.

More here.

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Anthem Of The Day: The "Thank You Facebook" Song

Comedian Joe Mande noticed that a group of exuberant Facebook fanatics have recorded a song and shot a music video thanking Facebook on the day of its IPO. The video -- called "Thank You Facebook Song -- dedicated to its FB IPO" -- was posted to YouTube on Wednesday and can be "enjoyed" below.

"I want to thank you for bringing to me...friends and family."

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Supplemental Reading

A few things Facebook doesn't want you to think about today:

Five Things Facebook Won't Be Telling You Today

CEO of Personal Capital, Bill Harris, offers his advice to Facebook millionaires:

A Million Dollars Won't Change Your Life

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Facebook Would Be 23rd Biggest Company In S&P 500

Facebook isn't yet part of the S&P 500 stock-market index, but if it were, it would be the 23rd-biggest company in that index, with its initial market cap of $104 billion, writes FactSet analyst John Butters.

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BREAKING: Facebook's Underwriters Step In

According to WSJ, Facebook’s underwriters stepped in to support shares at the $38 IPO price.

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An Off Day For Nasdaq?

The Facebook IPO has been a bit of an embarrassment for the Nasdaq stock exchange.

First there was a delay in the opening of trading of about half an hour. Then technical issues may have contributed to the stock price stumbling after the open, from an opening of about $42, all the way back down to its IPO price of $38. At that point, underwriters jumped in and rescued the stock from falling beneath that price and making the universe collapse in on itself with shame.

CNBC is reporting that there was a Nasdaq delay in executing trades, which caused buyers to back away from the stock, which contributed to the brief tumble back to $38.

The whole thing is reminiscent of the pratfall the BATS high-frequency exchange suffered when it tried to launch its IPO on its own exchange. This could be another example of how the ability to cram a market full of hundreds of millions of orders in nanoseconds is not always entirely desirable.

But this might not all be the Nasdaq's fault: Facebook's stock still isn't doing particularly well, recently trading at around $40 a share. That's not as disastrous as a first-day decline, and may even be a sign the IPO's underwriters priced the stock to near-perfection. But it is somewhat surprising, given the insane level interest in this IPO, that the jump has not been even higher.

-- Mark Gongloff

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Occupy Wall Street Movement Weighs In On Facebook IPO

#facebookIPO is again building on the backs of the public. The company should be owned by the users not the usual youtu.be/rpbRXXntGM8

— Occupy Wall Street (@OccupyWallSt) May 18, 2012

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IPO Isn't The Only Thing Enriching "Facebook Mafia"

This morning's IPO isn't the only way former Facebook employees are getting rich. They're also starting new companies and investors are swarming to snap up shares. Also known as "The Facebook Mafia," Facebookers turned startup founders have collectively attracted $271 million worth of venture capital since 2006, according to financial analysis firm CB Insights. In the first half of 2012, Facebook Mafia scored $130 million amid all the hype around their former employer. Companies started by a Facebook mafioso include Path, Cloudera, Asana and Quora. Web companies like Google and PayPal similarly spawned a wave of startups founded by early employees. CB Insights says it will soon release a free report on the economic impact of the PayPal, Google and Facebook Mafias.

-- Nate C. Hindman

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The Mark Zuckerberg Wealth-O-Meter

Follow Mark Zuckerberg's worth in real-time as he sells $1.2 billion worth of stock.

(CREDIT: WSJ)

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Updates From The HuffPost Tech Front Page

HuffPost Tech's Facebook IPO Big News Page

IPO To Make Bono World's Richest Musician

This Is What A Real Facebook Stock Certificate Looks Like

No, You Should Not Buy Facebook Stock Today

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Facebook IPO Trading Opens At $42

According to CNN Money, Facebook shares opened at $42.05, an 11% increase from the company's $38 IPO price.

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It Begins!

Facebook, Inc. trades 82 million shares in first 30 seconds. Facebook IPO live blog - bit.ly/JXw9RQ $FB

— Reuters Top News (@Reuters) May 18, 2012

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Twitterers Joke About The Trade Delay

Very bad numbers. FB up %0.00 percent YTD.

— Farhad Manjoo (@fmanjoo) May 18, 2012

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Why Is Facebook Going Public?

Why is Facebook going public? It couldn't figure out the privacy settings either.

— Elizabeth Fish (@elizabethfish) May 18, 2012

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Trade Delay

Facebook opening trade has been delayed by five minutes, according to TechCrunch.

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Zuck Rings The Bell

In this image provided by Facebook, Facebook founder, Chairman and CEO Mark Zuckerberg, center, rings the opening bell of the Nasdaq stock market, Friday, May 18, 2012, from Facebook headquarters in Menlo Park, Calif. The social media company priced its IPO on Thursday at $38 per share, and beginning Friday regular investors will have a chance to buy shares. (AP Photo/Nasdaq via Facebook, Zef Nikolla)

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Facebook Takes A Hit On IPO Day

Facebook users are suing the social network for $15 billion -- almost as much as Facebook will raise from going public. The class-action case claims that Facebook invades privacy by tracking Internet usage.

“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” David Straite, a Stewarts Law partner, said in the e-mailed statement.

Read the full story at Bloomberg here.

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Facebook Shares Will Start Trading On Nasdaq At 11AM ET

In just a few minutes, Facebook shares will hit the Nasdaq. Facebook has priced its shares at $38 a share.

As Joshua Topolsky pointed out earlier, you won't be able to see this again:

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Comments

[glitterpet]

08:21 PM on 05/21/2012

Just what IS facebook, really? It does not generate knowledge, it does not create lifesaving drugs or proceedures, it does not do research of any kind. . . it's like the corner bar, without the smoke!

If I had money I cared to invest I would not take a gamble on something so. . ephemeral (I'm using the most kind word I can think of right now) . and with no reason to exisit beyond serving as an advertising platform . . but, to each their own! =)

[KeepNIt2Real]

10:12 AM on 05/21/2012

Is anyone as tired of seeing, hearing and reading about Zuckerborg as I am? Sheesh....be gone already guy!

[68Namvet]

08:02 PM on 05/20/2012

I do not have a Facebook account/page. I will never have a Facebook account/page. I don't care if Facebook falls off of the cliff tomorrow. nuff said.

[Reno Fickler]

07:54 PM on 05/20/2012

Neither JPM not MS could stand another financial "hit". Their credibility would sink even further. The analyists on CNBC said they didn't really know how long the investment bankers could afford to keep the stock above the IPO price. If you watched the ticker, right at the close (4:00pm ET) the price was $38.00-38.01. Many people who bought the stock earlier still had't got a conformation what price they were going to pay even by the close, since there was so much trading going on. Jim Cramer, said, "Stay away," the day before the IPO. Those brokers who bought millions of shares at the opening price and sold a few hours later for 8-10% profit did just fine. Many who bought have no choice but to hold on and watch it.

[livingdangerously]

03:07 PM on 05/20/2012

Anyone going short on Monday? I'm debating.

[Reno Fickler]

08:00 PM on 05/20/2012

2 out of 10 of FB type stocks held their value for more than 90 days. If I was going to do anything I'd 'short' it, too.

[Scent]

12:17 PM on 05/20/2012

That is the core of american economics and free market: stealing data and then selling them makes billions for the thieves.

And we wonder why our economy is in the crapper

[brettrobbins]

07:48 AM on 05/20/2012

"Aww, look at that: Facebook shares have their very first "sell rating" from a Wall Street analyst." Mark Gongloff

Is this journalism? Just checking.

[greysells2]

08:27 PM on 05/19/2012

The FB IPO was a pschological event. It took place inside peoples' heads. The reprecusions will take place inside the wallets and purses of the innocent.

[imdesign]

07:43 PM on 05/19/2012

Zuckerberg now answers to his new facebook friends - Shareholders. The original concept has been traded and profit above purpose has become its driving force.

[greysells2]

07:36 PM on 05/19/2012

If an individual person "games" the stock market by manipulating the price through timed purchases and sales so that the price is made artifically higher than the market would determine, that would be a crime. Fraud, I think, because a number of people would have paid more than the underlying market price. I am a "person" and I believe I would be charged in that situation. If a corporation, like the underwriters of this FB stock sale is a "person", as well, would it be charged with the same crime as me? Just wondering about basic fairness and the level playing field of the capitalist system where supply and demand determine price?

[Jameslyons]

06:30 PM on 05/19/2012

Hmmmm.... A hyped up stock didn't do well? That's crazy ..... :p

[PrimoPablo]

06:27 PM on 05/19/2012

Facebook ain't no Google. I think Yelp has the best shot out of all of them. It has benefit.

[Jared Jentzsch]

06:14 PM on 05/19/2012

I heard the stock stayed at $38 because it was insured to stay there and that the underwriters had to buy a bunch to keep it at $38. Facebook saves Face.

[Jonnynav]

06:06 PM on 05/19/2012

Who cares about Facebook, enough of this hysteria. It's a social network site, not the essence of business and capitalism. Valuation of 100 billion USD for a website reminds me of the crazy investments going on before the internet bust 2000. We never learn.....

[Wolfman Thomas]

05:46 PM on 05/19/2012

Facebook kicked me off their website for using the word Jew

[Jameslyons]

06:31 PM on 05/19/2012

I'm sure all those orthodox jews were just protesting your use of internet , and helping flag you.

[Wolfman Thomas]

06:42 PM on 05/19/2012

now we know who controls the media and the money in the USA

[glitterpet]

08:24 PM on 05/21/2012

. . . maybe it was the context in which you used it? Just asking. . .