FACEBOOK IPO LIVE: The social network goes public
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Updated 07:13 a.m., Friday, May 18, 2012
The site, which was born in a dorm room eight years ago and has grown into a worldwide network of almost a billion people, is making the most talked-about stock market debut in years. In Times Square, people walking by are taking pictures of the giant Nasdaq billboard, which today features the Facebook logo. At Nasdaq's streetfront location in Times Square, Dennis Hitchings, a retiree from Columbus, Ohio, was peering through the window at Nasdaq's board of constantly changing stock prices. Annual net income — Google $9.7 billion, Facebook $668 million. Wearing his trademark hoodie and standing before a huge crowd in Menlo Park, Calif., CEO Mark Zuckerberg symbolically opened trading on the Nasdaq Stock Market. The broader market opened slightly higher, with the Nasdaq composite index up about 10 points, or 0.3 percent. By comparison, here are the top five companies in the Standard & Poor's 500 index by market value, based on Thursday's closing stock prices: In the most highly anticipated Wall Street debut since the heady days of the dot-com boom, shares of Google surged nearly 20 percent on their first day of public trading Thursday as the quirky Internet company completed its much-hyped initial stock offering. Despite the first-day jump, the debut generated much less money than the company envisioned after it launched an unorthodox auction designed to open the stock beyond large investors who typically get first crack at new stock issues. Google shares finished the day at $100.34, up 18 percent, and the stock offering raised $1.67 billion. CALIFORNIA CASH Besides minting Internet billionaires, the Facebook IPO should provide a little help for the cash-starved state of California. The state's nonpartisan Legislative Analyst's Office says the IPO will generate $1.6 billion to $2.6 billion for the state through the middle of next year as shareholders cash in their stock. Pandora, an Internet radio company, went public June 15 at $20 a share. [...] LinkedIn, a social network for professionals, more than doubled from its $45 offer price within minutes of hitting the market last May 19. CEO Mark Zuckerberg is selling about 30 million shares of Facebook as part of the initial public offering. Zuckerberg will control the company with 56 percent of its voting stock as a result of agreements he has with other shareholders who promise to vote his way. Co-founded Facebook in his Harvard dorm room in 2004. According to the company, this is when the site passed milestones for its number of active users, defined as someone who logs on at least once a month: Andrew Schneider, a hedge fund adviser and CEO of San Francisco-based Schneider Family Office, was busy selling shares of Apple and LinkedIn on Thursday to free up cash for buying Facebook. "A lot of people went on the short side of Google when it opened," says Schneider, who is also CEO of Global Hedge Fund Advisors. Whitney Tilson says his hedge fund, T2 Partners, avoids newly public companies as a rule because companies tend to go public only when things are going well. Tilson admits, though, that avoiding initial public offerings doesn't always work. The Dow Jones industrial average dropped 156 points and has fallen 11 of the past 12 days, mostly because investors are nervous about turmoil in debt-burdened Greece. The Nasdaq composite, representing the stock exchange where Facebook will trade, fell 2 percent on Thursday.
May 17 (Bloomberg) -- Web entrepreneur Charlotte Coleman discusses the use of social networking by small businesses. She speaks with Mark Barton on Bloomberg Television's "Countdown." (Source: Bloomberg)
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