After Chaotic Day, Facebook's IPO Stock Price Ends Where It Started
Record Trading Volume; Prices Peak, Plummet, Then Settle
May 18, 2012 at 3:08 PM (PT)
After all the Sturm und Drang that emanated from FACEBOOK's IPO debut on WALL STREET, its stock price ended the day pretty much where it began: at $38.23 a share, just 23 cents higher than the initial asking price, CNN reports. What was noteworthy was the volume of trading: Around 567 million shares were traded, breaking the IPO opening day trading record of 450 million shares, held by GM in 2010.
At $38 per share, FACEBOOK's market capitalization is calculated to be around $81 billion. Add in all of FACEBOOK employees' unexercised stock options and the company's total valuation would be closer to $107 billion.
For his part, Co-Founder/CEO MARK ZUCKERBERG planned to sell 30.2 million shares TODAY, which would net him about $1.1 billion, much of it to be used to cover the massive tax bill for the sale. However, by exercising a large stock-options grant, ZUCKERBERG's ownership stake will rise to 503.6 million shares, about 31% of the company, which is worth $19.1 billion at the IPO price.
The other big seller was venture capital firm ACCEL PARTNERS, which sold 49 million shares -- about a quarter of its FACEBOOK holdings.
But What A Day It Was...
FACEBOOK INC.'s IPO debut on WALL STREET could best be described as "chaos, then cooling." According to the L.A TIMES, NASDAQ halted stock sales for three hours due to the overwhelming demand to buy and sell it. Once sales began, the stock jumped 11% right off the bat; NJ.COM printed a NBC tweet claiming that 82 million shares were sold in the first 30 seconds -- and according to the WALL STREET JOURNAL, broke 100 million within three minutes.
But after a high of $45, sellers quickly started cashing out and the stock price dropped below the $38 initial offering. FACEBOOK's underwriters then stepped in to support the stock after it fell back to the IPO price, where it ended when trading closed for the day.
"It’s a total disaster because the stock is trading right at the IPO price," IPODESKTOP.COM Editor FRANCIS GASKINS told the TIMES. "They didn’t want that in a million years. A traditional IPO is up 10% or 15%."
Complicating matters were NASDAQ's exchange systems, which failed to send electronic reports back to traders and firms to confirm that shares had been bought or sold. "People need a message saying they bought or sold it," a trader told WSJ. "Clients are frustrated because they can't get those reports back -- basically, they're blind."
NASDAQ officials said it was "investigating an issue in delivering trade execution messages" from trades made in FACEBOOK's IPO. "NASDAQ is working to deliver these executions back to customers as soon as possible," the notice asserted.
View FACEBOOK's SEC filing here.
NASDAQ is offering a "real time" look at the new stock offering, which you can follow here.
If you want to see how CNBC practically blew a gasket covering this thing, click here.
Bono Gets Richer
While ZUCKERBERG might be the richest person involved in TODAY's IPO, but he's not the most famous. MTV reports, "once the smoke clears from TODAY's FACEBOOK IPO, U2 singer BONO could be the richest musician on the planet. According to ENGLAND's NME, the already flush, tech-savvy IRISH rock icon owns 2.3% of the shares of FACEBOOK through his investment group, ELEVATION PARTNERS. Well before FACEBOOK filed papers to go public, ELEVATION paid $90 million for the shares in 2009 and after what is expected to be the second-biggest IPO in history, BONO's share could be worth more than $1.5 billion."
Class Action Suit Filed
On a negative note, BLOOMBERG reports FACEBOOK has been sued by users of its social network "in an amended class-action case claiming the company invaded their privacy by tracking Internet usage and seeking $15 billion. The lawsuit, filed in Federal Court in SAN JOSE, CA, combines 21 cases filed across the U.S., according to a statement by STEWARTS LAW US LLP, one of the firms leading the claim. It accuses FACEBOOK of improperly tracking users even after they logged out of their accounts."