Facebook IPO update
Over the past few weeks the media world has been abuzz with news of Facebook's initial public offering (IPO).
Many investors are looking to capitalise on the company's success – with over 900 million monthly active users and estimated to be worth over one hundred billion dollars, the social media giant is predicted to be a big player in the share market.
And with trading expected to start today on the NASDAQ Global Select Market, all eyes are looking towards Mark Zuckerberg and his team.
In the lead-up yesterday, Facebook officially announced the pricing of its IPO shares. Common stock available for purchase by the public has been valued at US$38 per share. In total, the IPO compromises of 421,233,615 shares.
While going public has the potential to be very lucrative for the social network, it does not come without its challenges. Facebook will now have a number of new obligations, such as keeping investors informed about business details including risks and earnings.
"It's probably one of the first times there has been an IPO where everyone sort of has a stake in the outcome," Gartner analyst Brian Blau told the Associated Press on May 17.
However, for those looking to earn a few extra dollars without actually investing in shares, some savvy entrepreneurs are thinking outside the square when it comes to capitalising on Facebook's IPO.
Tom Waterhouse, an online bookmaker, is taking bets on how successful the social media company's first day of trading will go.
"Google's share price rose 18 per cent on its first day of trading in August 2004 to value the company at just over US$27 billion," Mr Waterhouse said.
"I'm tipping Facebook to have a similar experience, albeit one that'll result in its market capitalisation exceeding US$120 billion when the closing bell rings to end its first day."
Only time will tell. The IPO is due to close on May 22, 2012.
Posted by Jess O'Connor