Wednesday, May 18, 2016

Facebook IPO: Stock jumps in public debut



NEW YORK (AP) — Facebook is updating its status to "public company" as its stock jumps in its debut on the Nasdaq Stock Market.The stock rose to $42.05 on Friday morning. CEO Mark Zuckerberg smiled as rang the opening bell from Facebook's hdquarters in Menlo Park, Calif. Surrounded by cheering Facebook employees and wring his signature hoodie, the 28-yr-old pushed the button that signals the opening of the stock market in New York.

On Thursday, Facebook and the investment bankers arranging the IPO settled on a price of $38 per share. The company and its rly investors raised $16 billion in the offering, which valued Facebook at $104 billion. That makes Facebook the most valuable U.S. company to ever go public.Now, the stock market will assign a dollar value to Facebook that will rise and fall with investor whims. It will be subject to broad economic forces as well as how much profit it rns from one quarter to the next. But Facebook is one of the rare companies whose IPO transcends Wall Street's money lust to become a cultural touchstone for the way technology is reshaping our lives. Since its start as a scrappy network for college students, Facebook has come to define social networking by getting 900 million people around the world to share everything from photos of their pets to their deepest thoughts.It has done so while managing to become one of the few profitable Internet companies to go public recently. It had net income of $205 million in the first three months of 2012, on revenue of $1.06 billion. In all of 2011, it rned $1 billion, up from $606 million a yr rlier. That's a far cry from 2007, when it posted a net loss of $138 million and revenue of $153 million. The company makes most of its money from advertising. It also takes a cut from the money people spend on virtual items in Facebook games such as "FarmVille."Facebook's public debut marks a new milestone in the history of the Internet — and the people who use it. In 1995, Netscape Communiions' IPO gave people their first chance to invest in a company whose graphical Web browser made the Internet more engaging and sier to navigate. Its hotly anticipated IPO lit the fuse that ignited the dot-com boom and culminated five yrs later in a devastating bust that obliterated the notion that the Internet had somehow hatched a new economy where making money no longer matter.It took Google Inc.'s IPO in 2004 to prove just how profitable a well-run Internet company with a disruptive id can be. In the process, the Internet srch lder is forcing other industries to adapt to a new order where people have come to expect to be able to find just about anything they want by entering a few words into a box on any device with an Internet connection.Facebook's IPO underscores an Internet evolution that has made the understanding of connections among people as important as Google's massive index of Web links. Now that Facebook will be under grter pressure to sell more advertising to bring in more revenue, this IPO also cast a brighter light on how just how much revling information that people have been sharing the past few yrs without fully understanding the impliions.Facebook's IPO almost certainly will enrich other up-and-coming entrepreneurs as Zuckerberg uses the company's trove of cash and stock to buy other startups in an effort to being in other talented engineers and promising technology. That's what has been doing for yrs. Since it went public in 2004, Google has spent $10.2 billion buying nrly 200 other companies. Those figures don't include Google's still-pending $12.5 billion acquisition of cellphone maker Mobility Holdings Inc., which is still awaiting regulatory approval in China.Zuckerberg's biggest dl came so far when he agreed to buy Instagram, a maker of a popular mobile app for photos, for $1 billion. Because most of the dl is being paid for in stock, Instagram is alrdy getting richer. Based on Facebook's IPO price of $38 per share, Instagram is in line to receive nrly $1.2 billion.Though Zuckerberg rang the Nasdaq opening bell from California, people outside the stock market in Times Square snapped photos of a big blue Facebook sign that lit up the building. Some of them used their smart to checked in to the Nasdaq on Facebook. Frederick Nolde, who was visiting from Richmond, Va., said he bought 100 shares through the online brokerage eTrade.He thinks the company is worth $100 billion. "I think Google is a good comparison and it's worth $200 to 300 billion. The rl question is how they do in mobile. if they can figure that out they'll do well."
Source: The Associated Press

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