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 shares show no gain on day one. In other breaking news, the Winklevii are cackling and rolling a blunt.
— N'Gai Croal (@ncroal) May 18, 2012

Weird, I swore Yahoo had a patent on flat stock growth. Add it to the lawsuit pile.
— MG Siegler (@parislemon) May 18, 2012

By the flat = win for Facebook logic, closing under $38 would have been a bigger win since they would have sold higher than market value.
— Gabriel Snyder (@gabrielsnyder) May 18, 2012

Facebook ends the day at $38. It's like this whole day of trading never happened.
— Heidi N. Moore (@moorehn) May 18, 2012

I predicted Facebook would finish the day below $38. I'd forgotten about the underwriters. It'll be $32 next week.
— John Perry Barlow (@JPBarlow) May 18, 2012

T-shirt: "I created an 800 million user platform that's barely begun to monetize and all I got was this $104 billion valuation."
— Chris Sacca (@sacca) May 18, 2012

So happy to see some kids from Harvard finally get a break.
— Ana Marie Cox (@anamariecox) May 18, 2012

More like IPOh Wow! Congrats to Mork Zipperberg & the whole Facebooks team! #money #stocks #wallstreet #bells #yelling #hello!
— rob delaney (@robdelaney) May 18, 2012

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

Boing Boing editor/partner and tech culture journalist Xeni Jardin hosts and produces Boing Boing's in-flight TV channel on Virgin America airlines (#10 on the dial), and writes about living with breast cancer. Diagnosed in 2011. @xeni on Twitter. email: xeni@boingboing.net.

MORE: Business • Economy • facebook • social networks • stock market

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http://twitter.com/fossilfuels Funk Daddy

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?
- Antinous / Moderator
  
  I believe that the answer is rather obviously “No.”
http://twitter.com/_m4tth3w_ Matthew Wong

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
- Atomicpanda
  
  Step one is enough.
- juan
  
  I really like the idea of organizing a “close your account and short facebook stock day” over facebook.
awjt

“Yahoo!”
EH

Boy, his haircut sure is telegraphing MPB.
- gtrjnky
  
  I give up – what is MPB?
  - http://www.youtube.com/user/ziccup akbar56
    
    Male Pattern Baldness
    - gtrjnky
      
      Can’t keep up with all these frickin’ acronyms
      - awjt
        
        CKUWATFA
      - Atomicpanda
        
        IKR
  - Antinous / Moderator
    
    Millionaire Playboy
    - MB44
      
      *BP
- http://profiles.google.com/joshuabardwell Joshua Bardwell
  
  What a useless comment. People get older, get fatter, and go bald. What does that have to do with anything?
  - EH
    
    That his image appears to be anticipating it.
    - hypnosifl
      
      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.
      - EH
        
        Fivehead! I learned something new today. :)
Jer_00

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?
- Uthor
  
  Planet Money said it’s worth that much … if they triple their user base and increase revenue per person 33%.
  
  http://www.npr.org/blogs/money/2012/05/16/150957728/how-facebook-can-live-up-to-the-hype
  - filebunch
    
    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.
darkjayson

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.
Navin_Johnson

Lot of suspicious looking guys in hoodies in that pic.
- EH
  
  All the cool zillionaires are doing it.
michaelismichael

I opened the thread hoping to join in a public hate-in on Facebook. I feel so let down.
- Finnagain
  
  I hate facepants.
- Atomicpanda
  
  It’s just not right to kick a corporation when it(s stock) is down.
Anne Onimos

A photograph of people photographing a photograph. This is The Golden Age of Idiocy.
- Atomicpanda
  
  Pretty sure we’ve been taking pictures of others taking pictures of large pictures for roughly the last hundred years.
- h4x0r
  
  but…. it has electrolytes. it’s what plants crave
h4x0r

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.
- elix
  
  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.
Alex Susemihl

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

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

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

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.
- penguinchris
  
  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 :)
  - http://twitter.com/tobymgraves Toby Graves
    
    The thing is: Google and Apple are *useful*. Facebook is worthless, really except as a form of entertainment.
    - Shashwath T.R.
      
      “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…
      - http://twitter.com/tobymgraves Toby Graves
        
        Films and Facebook are quite different things.
      - Shashwath T.R.
        
        @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!
      - twianto
        
        It’s quite simple: everything I don’t like is worthless. There you go!
    - EH
      
      Even Microsoft is “useful,” yet (last I checked) their stock has been flat for over a decade.
- CourierPica
  
  {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.
pebird

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

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.