Facebook Goes Public!
Is Facebook’s IPO the key to unlocking global success?
Today marks an important day in the history of Facebook and, for that matter, in the history of Wall Street. With Facebook’s stock market launch this morning – delayed by a NASDAQ glitch, which only served to heighten anticipation – Wall Street experienced its largest tech IPO. An IPO, not to be confused with the PEOs we normally discuss, is an initial public offering. Essentially, a company or organization begins to sell stock publicly to investors and traders. Typically an IPO is valuable in that it provides financial capital to allow future growth. With nearly 1 billion users (estimates suggest that there are about 900 million – that’s 900,000,000 – current users), Facebook does not necessarily need growth with respect to users. Yet, it still gains from its historical IPO. First, it creates hype and although Facebook does not necessarily need publicity, the old cliché says “all publicity is good publicity,” implying that Facebook will reap benefits from its IPO. It is only Day 1 of Facebook’s tale on the stock market and already Facebook has harvested an estimated $16 billion dollars through the sale of public stocks. This money can be funneled into new research and product development, imperative for Facebook when social media has to continually evolve in order to remain relevant. Plus, this makes Facebook’s founder, Mark Zuckerberg, move from incredibly wealthy to unbelievably wealthy. CBS This Morning reports that Facebook’s IPO will make Zuckerberg a billionaire 30 times over. Furthermore, Facebook now has an official company value, $104 billion.
Undoubtedly, today was a marked day for Facebook. The incredible sales within just the first thirty minutes of public purchasing, which caused a ten percent rise in the stock’s value, highlights the strength of Facebook’s image. Wall Street also had a much needed boost, in public opinion at least, possibly the first since the Occupy movement began. Yet, will Facebook’s momentum continue? Many companies flop after their IPOs. (If none come to mind, that proves my point.) Facebook’s stock value fell slightly after its initial hike. Will Facebook join companies like ArcSight (who?) and Kozmo (what?) who floundered after their IPO or will Facebook continue to rise? Share your thoughts in the comments.