The biggest IPO on Nasdaq just about claims the title
19 May 2012 5:20 AM GMT
Making a just-above-average stock market debut, the shares of Facebook started trading with a premium at USD 41.2 on Friday night (India time). They opened with over 10 per cent premium compared to its initial public offer price of USD 38.
The social networking site's initial public offering (IPO), that mopped up USD 16 billion, is one of the largest in the history of US companies.
But after 15 minutes, the initial gain came down to USD 40 on the Nasdaq stock exchange.
The price band of the IPO was set at USD 34-38, which experts thought was a moderate success.
Setting the stage for the much-awaited trading of Facebook, its founder Mark Zuckerberg rang the opening bell at the Nasdaq stock exchange on Friday. He rang the bell from the headquarters of Facebook in California, USA. Standing outside his Menlo Park company headquarters, Zuckerberg was surrounded by executives and hundreds of employees as he rang the opening bell and signed on a glass podium.
Taking into account the price band, the popular social networking site is the largest US company at its debut with a market value of over USD 104 billion.
The Facebook chief operating officer Sheryl Sandberg was standing beside Zuckerberg, who hugged his fellow executives after ringing the opening bell. Wearing his trademark grey hoodie, Zuckerberg also waved at this employees.
The shares started trading on the Nasdaq under the ticker symbol 'FB'. Facebook put up 421 million shares of its common stock up for sale.
Morgan Stanley, JP Morgan, Goldman Sachs, Bank of America Merrill Lynch and Citigroup are among the players managing the offer.
The largest offering so far was that of Visa, that raised USD 17.9 billion in 2008.
However, many experts believe that the stock is overpriced at USD 38 apiece and one must wait for now to invest in the firm. The ex-professor of the NYU Stern School of Business Finance Kenneth Froewiss said that adding Facebook to a portfolio early on is risky for experienced pros and investment amateurs alike. 'Even for those individuals with above-average net worth, purchasing shares at an IPO, especially a “hot” one that has been widely hyped, is rarely a good idea,' Froewiss said.
He said it is like playing a lottery. 'Might someone on occasion reap a tremendous windfall by doing so? Yes, but then again, on occasion someone wins the lottery. That does not make the lottery a great investment in general,' he added.
The current excitement about the company's stock market debut does not guarantee long-term interest or success, another expert said. 'In my experience this stock and its IPO has seen more enthusiasm than any other I have seen over my 40 years of investment experience,' said Lewis Altfest, CEO of NYC-based Altfest Personal Wealth Management.
The public offer is expected to close on 22 May.
The social networking site's initial public offering (IPO), that mopped up USD 16 billion, is one of the largest in the history of US companies.
But after 15 minutes, the initial gain came down to USD 40 on the Nasdaq stock exchange.
The price band of the IPO was set at USD 34-38, which experts thought was a moderate success.
Setting the stage for the much-awaited trading of Facebook, its founder Mark Zuckerberg rang the opening bell at the Nasdaq stock exchange on Friday. He rang the bell from the headquarters of Facebook in California, USA. Standing outside his Menlo Park company headquarters, Zuckerberg was surrounded by executives and hundreds of employees as he rang the opening bell and signed on a glass podium.
Taking into account the price band, the popular social networking site is the largest US company at its debut with a market value of over USD 104 billion.
The Facebook chief operating officer Sheryl Sandberg was standing beside Zuckerberg, who hugged his fellow executives after ringing the opening bell. Wearing his trademark grey hoodie, Zuckerberg also waved at this employees.
The shares started trading on the Nasdaq under the ticker symbol 'FB'. Facebook put up 421 million shares of its common stock up for sale.
Morgan Stanley, JP Morgan, Goldman Sachs, Bank of America Merrill Lynch and Citigroup are among the players managing the offer.
The largest offering so far was that of Visa, that raised USD 17.9 billion in 2008.
However, many experts believe that the stock is overpriced at USD 38 apiece and one must wait for now to invest in the firm. The ex-professor of the NYU Stern School of Business Finance Kenneth Froewiss said that adding Facebook to a portfolio early on is risky for experienced pros and investment amateurs alike. 'Even for those individuals with above-average net worth, purchasing shares at an IPO, especially a “hot” one that has been widely hyped, is rarely a good idea,' Froewiss said.
He said it is like playing a lottery. 'Might someone on occasion reap a tremendous windfall by doing so? Yes, but then again, on occasion someone wins the lottery. That does not make the lottery a great investment in general,' he added.
The current excitement about the company's stock market debut does not guarantee long-term interest or success, another expert said. 'In my experience this stock and its IPO has seen more enthusiasm than any other I have seen over my 40 years of investment experience,' said Lewis Altfest, CEO of NYC-based Altfest Personal Wealth Management.
The public offer is expected to close on 22 May.
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