So today is the big day, our favorite little social media engine that could now turned social media giant, Facebook, is officially going public! There is a lot of hype surrounding the biggest initial public offering (IPO) for a U.S. technology firm, and Facebook announced on just yesterday that its initial public offering of common stock would be priced at $38 a share, raising $16 billion and valuing the company at $104 BILLION.
So should we public, the 900 million monthly users of the social media site be interested in buying into Facebook? Not really. The shares available for purchase by the public will likely be priced higher, around $45 a share or more. Most of the goodies will be snatched up early by institutions, venture capitalists and major corporations. This has caused some analysts to caution individual investors not to rush into making any risky investments. Frankly, I have to agree. Even the hottest IPO offerings lose steam can after their first day of trading. But that is why they call it a risk after all!
While this is a great accomplishment for the company, it’s popular 28 year-old CEO Mark Zuckerberg and his staff, the expectations for Facebook are quite high. According to Andy Hill, founder of Andrew Hill Investment Advisors in Naples,“Facebook will be required to blossom like Google did.”
But can they? It has been a long controversy with Facebook that the tremendous amount of detailed data they hold about their users is what gives the company so much value to advertisers, yet they constantly claim that the user’s information is private and “safe” with them. We can only hope for Facebook that they will continue to find new ways to monetize their almost billions of users, without violating their privacy policies.
So the big question we are sure many investors wish they predict the answer to is:
Will Facebook continue to prosper and grow after going public like Google, or tank like Groupon has done since going public last November?
Take the vote!
Lets see what happens Facebook! Good luck!