Facebook Inc (NASDAQ:FB) is now a fully fledged member of the Public market having closed up on its first day of trading. The firm closed at 38.23 after opening this morning at 38 with Mark Zuckerberg ringing the bell. The company’s market capitalization is $104 billion after the day’s trading.
Trading of Facebook shares was, as could have been expected, rapid today. The company had a trading volume of a ridiculous sounding 515 million on its first day. The day leaves Mark Zuckerberg with $1.2 billion in liquid assets while retaining 57% of the company he founded.
The lack of any reasonable growth in the stock price will worry some investors as fears that the stock is overpriced abound. Many have suggested that the $100 billion valuation is almost silly for a company that expects revenues of $4 billion this year. The firm’s stock had hit a height of 45 in the middle of the day before dropping back down to its opening value at the end of the day.
The debate will range over the coming months, and quite possibly years, over whether or not the company was overvalued today. A major correction seems unlikely in the near future.
One thing is absolutely certain about today’s offering. For some time the only stock that has been popularly followed has been Apple’s investors and non investors alike are fascinated by the company. Facebook is surely, for the next few weeks at least, to be added to the list of companies whose share price will be followed by people with no interest in investing. That alone may make it a dangerous stock to be involved with.
Facebook is a dangerous bet. The company is untested and is operating in a market being created as it forges ahead. that is not to say it is likely to fail. Apple continues to create new markets and excel in them. Whether or not Facebook is likely to be able to continue its success is difficult to know. Shareholders have faith in Zuckerberg’s leadership. That is vital going forward.
Facebook’s IPO has attracted a lot of retail investors to the market. It may have encouraged investment by many who were previously uninitiated in equity investing. The media storm around the company’s offering has throttled the internet today as even those uninterested in the market took a perverse interest in the move. The sums of money being talked about and the ubiquitous knowledge of the product drove interest to levels above any other IPO since at least Google’s 2004 offering.