post Monday May 21, 2012
The day arrived after much anticipation. Friday Facebook’s stocks finally were offered to the public and are tradable at Nasdaq. Facebook has successfully raised over $16 billion on their IPO (share price of $38) and is valued at $104 billion. Friday the share price fluctuated between $37.96 and $43.08. For an IT company to be valued more than some of the corporate giants like Amazon and McDonalds, whom have decades of experience, it is no doubt a great accomplishment.
Facebook has grown from a small website dedicated to create a closed network connecting the students of Harvard University, to a multibillion dollar corporation connecting 900 million people around the world in the span of 8 years. In 2005, Facebook was rumored to be valued at around $100 million, to $104 billion in 2012, that is a value increase of more than 1000%. So if one would have invested an insignificant $1000 worth of stocks back in 2005, today that equity would be valued at $1,040,000. Definitely a lucrative investment.
However, by how much more can the company grow? There are many skeptics, saying that Facebook has reached its peak, and that the value of the company can only go down from here on. Odds are, that if we were to invest $1000 worth of equity today, in 8 years time we probably would not be half as well off as we would have been had we been able to invest 8 years ago. The shorter term however may appear to be more profitable. Many analysts expect the share price of Facebook to quickly increase to around $44-$45 within the first couple of days, after which the forecasts are not quite clear.
What do you think? Are you a believer and a possible investor?
Whatever the skeptics say, and the fate of Facebook be, it is no doubt one of the most anticipated and spoken of IPO’s in the history of IT companies.
[Sources: Barbara Ortutay,2012. “Facebook IPO Date: 'FB' Set To Begin Trading May 18 After $16 Billion Offering”, Huffington Post; Mary Bellis, “Who invented Facebook”, Inventors About; Austin Carr, 2010. “The Facebook Valuation Timeline: Do We Hear $10 Billion? $50 Billion??? $1 Trillion?!?”]
Image courtesey of http://tweakers.net/nieuws/82025/facebook-heeft-zijn-beursgang-gemaakt.html
