Popular social networking service begins offering stock for public trading

Facebook Inc. CEO Mark Zuckerberg is seen on a screen televised from their headquarters in Menlo Park moments after their IPO launch in New York. (REUTERS)

Shares of Facebook (FB) opened at $42.05 on today, up about 11 percent from the IPO price of $38. At this valuation, the company is worth around $115 billion. But shortly after the open, despite all the bubblicious hype leading up to FB's debut: share price dropped. At the time of this blog post, the price is hovering around $38.

The WSJ reports that trading volume was more than 375 million in first three hours of listing, more than 6.5% of total market volume. Trade volume is expected to set a new record in trading volume on IPO day.

STOCKENFREUDE (n): That feeling you get, as someone who loathes Facebook, seeing FB shares crap out on IPO day.

Analysis: NYT Dealbook, CBS, USA Today, SJ Merc, LAT, WSJ.

Facebook's share prices are seen inside the NASDAQ Marketsite in New York May 18, 2012. (REUTERS)


  1. Don’t these people know that today’s IPO is just a sweet ass wealth transfer benefitting the private stockholders, who bought in long before, at the expense of those who don’t know that “meteoric trajectories” generally end in fire and ash?

  2. Okay, here’s The Plan
    1. Let’s all stop using Facebook.2. The price of shares will drop3. We’ll buy up it all up really cheap4. Then we all start using Facebook again5. ?????? (obligatory question mark step)6. Profit  

    1. I really like the idea of organizing a “close your account and short facebook stock day” over facebook.

        1. As someone who’s always had a high forehead (i.e, a fivehead) I think you’re maybe confusing that issue with male pattern baldness. I googled “Mark Zuckerberg 2007″ to see what he looked like five years ago and found this page, his hairline/hairstyle seems to be pretty much unchanged.

  3. I still haven’t seen a single bit of analysis that says exactly why I’m supposed to believe that Facebook is worth $38 a share.  Anyone have a link?

      1. The problem for an analyst looking at Facebook is twofold.  1)  the history of these sites being “flash in the pan” (i.e. MySpace) and 2) the vast majority of users are children/young adults.  Not exactly a demographic you want to bet on.

  4. Type facebook stock into google and first link is there share on the nasdaq currently at 38.27 multiply that by 900,000,000 users you get 34,443,000,000 or 34 billion which is around what it is valued at, so $38 per user. Not sure if that is how they calculate it but its close.

  5. I opened the thread hoping to join in a public hate-in on Facebook. I feel so let down.

  6. A photograph of people photographing a photograph.  This is The Golden Age of Idiocy. 

    1. Pretty sure we’ve been taking pictures of others taking pictures of large pictures for roughly the last hundred years. 

  7.  I predict the stock soars as a result of an announcement about new feature(s) and revenue potential (Or speculation about such an announcement/plan) . It will then fluctuate and hold steady around $80-$100/share. 1 year from now, it will be teetering at around $250/share or thereabouts….right before some new/innovative answer to Facebook comes out, it plummets to $25/share after some new craze takes hold…or, we just get sick of Facebook.

    1. I’ll make the popcorn, you bring the drinks. Next major privacy snafu at Facebook, I’m kicking my heels back and watching the market.

  8. I believe Stockenfreude should be feminin, as Freude is feminin… assuming it’s german. Awesome concept otherwise!

    1. I don’t know German, but I do know that it has gendered nouns. English doesn’t, so the gender’s discarded in translation. But your point makes sense. :D

  9. “Popular social networking service” facebook, as opposed to… the fried chicken franchise or hardware supply store facebook?

  10. So it closed exactly like it opened, indicating that the stock price was extremely realistic, neither too low nor too high? What incompetent hicks! Har har!

    1. Not exactly.  The investment bank who handled the IPO had to buy millions of shares themselves to keep the price at $38.  

  11. Yeah, regarding STOCKENFREUDE

    I can get behind almost any kind of Facebook-hate, but the only thing that’s remarkable about the closing stock price is that it’s so close to the IPO price. And all that means is that Facebook’s accountants did a great job in setting that initial price.

    Facebook neither needs nor wants a huge first-day bubble in its stock price. Any profit someone else makes on the first day is profit Facebook missed out on! I can promise you that the champagne corks are being popped at Facebook HQ over this result.

    1. I agree with that analysis. Furthermore, I don’t think it’ll ever rise to e.g. Apple or Google levels unless they plan to expand their business into other areas – which I’m sure they know would be risky for them. And I think they know that.

      They surely know they’re already worth a ridiculous amount of money for what they are, and I think they’ll play it smart and plan for slow and steady growth – they can certainly afford to.

      Which means that in ten or fifteen years we’ll all be thinking “why didn’t I buy Facebook stock back then?”, but no Wall Street assholes will become millionaires overnight on the back of Facebook. That’s making a huge assumption of course that they’ll last that long- though I think they could; they’ve shown better promise than e.g. MySpace did, though haters like to trot out the list of social networks that everyone moved on from to the next big thing.

      Seems smart all around. I have a Facebook account with little on it – I was a freshman in college in 2004 and my school was one of the ones Facebook was initially rolled out to after Harvard and Stanford – but I’m a naysayer as much as anyone at BB. Doesn’t mean I can’t think they’re making smart business moves :)

        1. “except as a form of entertainment” – That means it’s worth something; at least as entertainment.

          The ridiculously high-value of films tells you what entertainment seems to be worth…

          You may have problems with that, but apparently many people don’t…

          1. @twitter-14059174:disqus  If your charge is that Facebook is of no use except as entertainment, and if entertainment gathers that much revenue, it follows that there’s nothing surprising about Facebook having that value.

            Entertainment has value too!

        2. Even Microsoft is “useful,” yet (last I checked) their stock has been flat for over a decade.

    2. {the only thing that’s remarkable about the closing stock price is that it’s so close to the IPO price. }

      This is not remarkable due to the job the accountants did in setting the price. It is remarkable due to the job the investment houses did to keep the stock from cratering.

      Check out Marketplace’s analysis: http://www.marketplace.org/topics/business/weekly-wrap-what-happened-facebooks-stock Every time the stock started to slip below the initial offer, the big houses stepped in to keep it afloat.

      Rather than being priced properly, I suspect some people are in for a haircut once the big houses let off the gas.

  12. So, Facebook is valued at $100 billion, and raises $16 billion in IPO. Public gets to own 1/5 of public company. Hmmmm.

  13.  True.  One thing the Planet Money article misses is that Facebook will probably try to diversify into other things beyond advertising, monetizing their programing platform.

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