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Facebook Shares Jump as Trading Opens on Nasdaq Market

Published: May 18, 2012 | 3:49 pm
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Shares of Facebook jumped 13% to $43 on a frenzied first day of trading on May 18, as investors stormed Wall Street to grab shares of the world’s leading social networking company.

he stock rose $5 from its initial price of $38 a share, indicating just how strong demand is for the company, especially from individual investors who largely couldn’t buy shares at the initial public offering price. The stock’s initial price was set on May 17 after the market closed at the high end of its expected range.

At its current stock price, Facebook is being valued at $121 billion, which makes it worth more than Amazon.com, McDonald’s, Cisco Systems and Visa. The company raised $16 billion in the IPO. It could raise more, up to a total of $18.4 billion, if the company’s investment bankers utilize an overallotment option reserved to satisfy additional demand.

The stock trades by the symbol FB on the Nasdaq exchange. Trading was expected to begin trading at 11 ET on May 18. But trading was delayed as market makers attempted to match buying and selling interest to arrive at a valid opening price.

The strong first-day debut, coming just after the initial per-share price of shares and number of shares being sold was increased during the week, shows just how high investors’ expectations are for the fledgling company.

The rich valuation for the company comes as it tries to cement its role in the Internet, as contributions by users and their interactions with each other become more important. Facebook has taken the lead by grabbing hundreds of millions of users, but still has much to prove in finding ways to boost the profit it earns from those users.

Source: USA TODAY

 

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