08 Jun Facebook’s Real Value
Don’t ponder how much Facebook is worth, ponder how you can use Facebook to grow your business.
We’ve all been waiting with bated breath for the Facebook IPO. Well, it came and went. Regardless of all the speculation and media hype, shares ended right near their offering price.
Is that a bad thing? Not necessarily. Facebook set its final IPO price at $38 a share. When the stock began trading at 11:30 a.m. ET on that fated day, the first trade came in at $42.05 per share — a gain of nearly 11%, according to CNN Money. But the stock quickly reversed course, dropping down to hover right around the $38 IPO price for much of midday trading. Though shares rose modestly for short bursts of time throughout the day, they ended the session at $38.23.
While the price itself didn’t move much, trading was fast and intense. More than 80 million shares changed hands in the first 30 seconds of trading. By the end of the day, volume had spiked to around 567 million shares. That activity easily set a new volume record for IPOs, smashing the previous record that automaker General Motors set in 2010 with trading of around 450 million shares. At the $38 IPO price, Facebook is on track to raise $16 billion, making it the largest tech IPO in history. It’s the third largest U.S. IPO ever, trailing only the $19.7 billion raised by Visa in March 2008 and the $18.1 billion raised by GM in November 2010, according to rankings by Thomson Reuters.
Underwriters have the option to purchase an extra 63.2 million shares to cover any so-called over-allotments for excess demand. If that happens, Facebook will sell 484.4 million shares in total. That would bring the amount raised to $18.4 billion.
What’s the bottom line? The company is worth a lot of money regardless of what happens with the stock price. For me though, I don’t worry or wonder how much Facebook is worth. I think that’s the wrong question. If you want to buy Facebook go buy it, but regardless of whether you’re a Facebook owner or not, you should be worrying and wondering how you can use Facebook to grow your business. That’s the question that you should be asking Read more