Facebook submits IPO paperwork
Facebook filed a $5 billion initial public offering last week, launching the social media network into the Wall Street public trading arena. The stock will not be available for trading for another three to four months.
Specific details are expected to surface in the upcoming weeks regarding how much individual shares will be worth. According to a recent CNN report, Facebook estimates its stock will sell for approximately $29.73 a share.
The IPO report Facebook filed shows the company’s value at $75 to $100 billion with approximately 850 million users. Majority shareholder and Facebook founder Mark Zuckerberg’s net worth will increase to $24 billion when trading begins.
The move has sparked a high level of excitement among potential shareholders. Facebook’s stock has the potential to become the most profitable Internet startup to be publicly traded since Google.
A recent New York Times article warns users this move could put their personal information at a greater risk. As Facebook moves to enter the public market, its operation will be more transparent than ever before. This will also force the social media giant to yield substantial returns for new investors.
Because Facebook’s revenue comes from advertisers, more information could be requested to target the audiences for personalized ad placement.
Opinions are scattered about the state of the social media and technology industry, as many believe the nation is in the midst of a social media “bubble,” much like the dot-com bubble of the late ‘90s. Even so, demand is very high among institutional and retail investors for a slice of Facebook equity. The lead underwriter in the Facebook IPO is Morgan Stanely, with supporting roles going to Goldman Sachs, Barclays Capital, Bank of America, Merrill Lynch and JP Morgan.
Wall Street recap
Stocks started the week slightly down, with the Dow Jones industrial average down 17 points at 12,845, the Standard & Poor’s 500 down a fraction of a point at 1,344 and the Nasdaq off by three points at 2,901. Shares traded lower on Tuesday with the DJIA down 0.2 percent at 12,819, the S&P 500 down a half percent at 1,336 and the Nasdaq off 10 points at 2,891.
–Compiled by Contributors Chet Galloway and Edward Henderson