Facebook stock closes nearly flat in debut
NEW YORK (AP) - It was barely a “like” and definitely not a “love” from Facebook investors as the online social network’s stock failed to live up to the hype in its trading debut Friday.
One of the most anticipated IPOs in Wall Street history ended on a flat note, with Facebook’s stock closing at $38.23, up 23 cents from Thursday night’s pricing.
It also gave 28-year-old CEO Mark Zuckerberg a stake worth $19,252,698,725.50.
“Going public is an important milestone in our history,” Zuckerberg said before he pushed a button that rang Nasdaq’s opening bell from company headquarters at 1 Hacker Way in Menlo Park, Calif. “But here’s the thing: Our mission isn’t to be a public company. Our mission is to make the world more open and connected.”
But for many seeking a big first-day pop in Facebook’s share price, the increase of six-tenths of one percent was a letdown.
It was also good for ordinary investors, who are mostly shut out from the IPO price and have to buy the stock in the open market on day one. They got a chance to buy all day at a price not much above $38.
And it was good for early investors in the company, who owned more than half the 421 million shares made available in the IPO. Had the stock shot to $60 Friday morning, those early investors would have felt they hadn’t gotten enough money for their stakes.
The 421 million shares that were sold fetched $16 billion and represented 15 percent of the company’s stock. Facebook got $7 billion, and the early investors $9 billion. The other 85 percent of Facebook’s stock is owned by Zuckerberg and other Facebook executives, employees and early investors. In comparison, Google offered just 7.2 percent of its stock when it went public in 2004. Its stock rose 18 percent on day one.
The stock opened at 11:30 a.m. at $42.05, but soon dipped to $38.01. It briefly traded as high as $45 and by noon was at $40.40. It fluttered throughout the afternoon and hugged the $38 mark for much of the final hour, before closing at $38.23.
By the end of the day, about 570 million shares had changed hands, a huge trading volume for any company.