Facebook shares can be bought today. It will be launched today at 4 pm at initial public offering (IPO) value at $38. You can buy facebook share on various websites and you can check NASDAQ website for where to buy facebook shares.
Facebook Inc. (FB) is set to start trading today after a record initial public offering that made the social network more costly than almost every company in the Standard & Poor’s 500 Index. (SPX)
Facebook sold 421.2 million shares at $38 each to raise $16 billion, a statement yesterday shows. That values the Menlo Park, California-based company at $104.2 billion, or 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.
That valuation also makes Facebook, co-founded in 2004 by a then-teenage Mark Zuckerberg, the largest company to go public in the U.S. Now the 28-year-old billionaire has to reward investors by squeezing more profit out of advertising, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.
“It shows tremendous confidence in the guy wearing the hoodie,” said Gordon, referring to Zuckerberg and the signature sweatshirt he wore during meetings to market the stock. “He hasn’t specified how he’s going to do it, but he’ll have to do it to justify this price.”
In less than a decade, Zuckerberg has overseen Facebook’s evolution from a Harvard University dorm-room project into a social network with more than 900 million users. Still, revenue growth is poised to slow for a third straight year and advertising sales haven’t kept pace with user additions.
26 Times Sales
Facebook, which priced at the top end of its range of $34 to $38 a share, is making its public debut at a valuation of about 26 times sales in the 12 months through March 31. That’s more than twice as much as AvalonBay Communities Inc. (AVB), currently the most costly company by that measure in the S&P 500.
“It seems like a very full valuation, but I’m sure there was an almost insatiable amount of retail interest in Facebook and that’s how the bankers looked at it,” said Dan Veru, chief investment officer at Palisade Capital Management in Fort Lee, New Jersey. “Everyone wants a piece of Facebook.”
At $16 billion, Facebook’s debut surpasses that of General Motors Co., making it the second-largest in U.S. history, excluding so-called over-allotments, which let underwriters buy more shares at a later date, data compiled by Bloomberg show.
Bigger Than GM
GM raised $15.8 billion in November 2010, before expanding the sale to $18.1 billion when underwriters exercised the over- allotment option. Visa Inc. raised $17.9 billion in its 2008 IPO, the biggest in the U.S., and later expanded the sale to $19.7 billion.
Facebook’s offering price gives it a market capitalization almost double the $60 billion United Parcel Service Inc., previously the biggest company to complete an IPO, was valued at when it went public in 1999, according to data compiled by Bloomberg and Dealogic.
Facebook stock is scheduled to start trading today at 11 a.m. New York time on the Nasdaq Stock Market, under the symbol FB. The bankers, led by Morgan Stanley, JPMorgan Chase & Co. and Goldman Sachs Group Inc., may split about $176 million for managing the IPO after accepting a lower-than-average fee for their work. They’ll get about 1.1 percent of what Facebook raised, said two people with knowledge of the matter, who declined to be identified because the rate is private.
The price gives Facebook a market value about half the size of Google Inc., which is worth more than $200 billion. The search-engine operator’s value has jumped almost ninefold in the eight years since it went public. To hand its public owners the same returns after pricing at the top of its offering range, Facebook would have to be worth about $920 billion by 2020. Apple Inc., the most valuable company in the world, has a market value of about $496 billion.
The offering eclipses the 2004 IPO of Google, one of Facebook’s chief competitors for online advertising. Google raised $1.9 billion in its initial share sale, including an over-allotment option. The shares sold at $85 apiece, giving Google a market value of about $23 billion, or about 10 times sales in the 12 months through June 30, 2004.
Facebook boosted the deal’s size amid a two-week series of meetings where Chief Executive Officer Zuckerberg, Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Ebersman pitched the sale to investors across the U.S.
“There’s hundreds of millions of people that want to emotionally buy this stock and most of them are going to have to buy it in the aftermarket,” said Jon Merriman, chief executive officer at investment firm Merriman Holdings Inc. in San Francisco. “I’d like to see it season over a couple of months.”
Facebook allocated about 15 percent of the shares to retail investors, according to two people familiar with the matter. That compares with the 15 percent to 20 percent that retail investors typically receive in U.S. IPOs, according to Jay Ritter, a finance professor at the University of Florida in Gainesville.
Venture capital firm Accel Partners, based in Palo Alto, California, planned to offer 49 million shares in the initial sale, while Goldman Sachs aimed to sell 28.7 million, according to terms Facebook disclosed this week. Digital Sky Technologies planned to sell 45.7 million shares, and Tiger Global Management planned to sell 23.4 million shares. Facebook executives and directors planned to sell 189.4 million shares.
Some institutional investors had balked at buying into Facebook over concern about the site’s growth prospects, people with knowledge of the matter said last week. The social network generated sales of $3.7 billion last year, which are poised to rise 64 percent to $6.1 billion in 2012, according to researcher EMarketer Inc. Last month, Facebook said first-quarter profit fell to $205 million as sales growth slowed and marketing costs more than doubled.
Facebook is trying to adapt as more users access its site via mobile phones instead of the Web. That put pressure on company executives to articulate their mobile strategy as they marketed the stock to potential investors ahead of the IPO. Facebook has said it would add mobile advertising along with new ads to reach users when they log off the company’s website.
Facebook still faces hurdles in traditional Web advertising. General Motors, the world’s biggest automaker by vehicles sold, said this week it was halting display ads on Facebook, while maintaining brand-promotion pages.
source: web , bloomberg