Shares in the social networking website Facebook made their debut on Friday and did not get the expected bounce.
They floated after founder and chief executive Mark Zuckerberg rang the opening bell for the Nasdaq exchange remotely from the company’s headquarters in Silicon Valley.
It is the third-largest initial public offering of shares in US history behind General Motors and Visa.
Valued at over 100 billion dollars – more than 80 billion euros – Facebook is worth more than Deutsche Bank, BMW and Adidas together.
The shares finally started trading much later than expected at 17.30 Central European Time, and immediately jumped from $38 to $45 – an 18 percent increased, but within half an hour the enthusiasm seemed to ebb and the price slipped back to $38 before picking up a bit in early afternoon trade.
The financial and internet worlds are watching with interest.
The shares were expected to shoot up on frenzied demand, especially from individual investors hoping to buy into an Internet juggernaut that touches hundreds of millions of people every day.
One analyst, Max Wolff with Greencrest Capital, said: “This is all about the future, so it really is a lottery ticket.”
He added: “The shares could initially rise and then it could go parabolic on a wave of retail investor hope. These shares are going to trade on hope. I do not know how to value hope.”
Inevitably the comparison is being made with a previous occasion when internet related companies were being traded on hope. That was over a decade ago; it turned out to be a bubble and a lot of people lost a lot of money.
Monthly active users woldwide (in millions) – Source: facebook
- 4 February 2004: Mark Zuckerberg launches his social network “The Facebook”, restricted to students at Harvard University
- September 2006: Facebook becomes available to everyone aged over 13 with and e-mail address
- August 2008: 100 million people around the world use Facebook
- July 2010: Facebook passes the 500 million subscriber mark
- 1 October 2010: The film “The Social Network” by David Fincher tells the story of the creation of Facebook, with the actor Jesse Eisenberg in the role of Mark Zuckerberg.
- 31 December 2011: Facebook is used by 845 people at least once a month and 483 million every day, resulting in more than 100 million friendship connections. In 2011 Facebook reports turnover of 3.71 million dollars.
- April 2012: Facebook buys Instagram, a start-up specialising in online image sharing, valuled at more than a billion dollars
- 17 May: Facebook is floated on the stock market with an initial price of 38 dollars a share