So last week the worst kept secret in the technology world was revealed as Facebook was finally Floated on the US Stock Exchange, but as always, it wasn’t all plain sailing for the now public limited company.
As was to be expected, the first morning saw a huge surge in investors looking to buy shares. In fact, it was reporting that initially share prices rose by 10% within minutes of becoming available, but as the day progressed it seemed that not all investors ‘liked’ this! By the close of play on the opening day, shares had only seen a marginal increase from $38 to $38.23.
Not that Mark Zuckerburg will be losing too much sleep over this, as it still means that the company is now valued somewhere in the region of $104 billion dollars and making Facebook worth as much as Amazon and even more than McDonalds. What makes this feat even more astonishing is that the company was only started just 8 years ago in a bedroom at Harvard University. Plus, when you compare this to Google’s
Flotation in 2004 when they raised $1.67bn it is a considerable return.
How the stock market floatation will affect Facebook and its users is still unclear, but it is certain that with the investors that now answer to the company, they will have to find inventive ways to generate more income from its users and advertising revenue streams.
Currently Facebook only makes around $5 for each of its 900 million users, so it’s clear the potential to grow the profitability of the company is enormous and advertisers will be looking to Facebook to attract new customers by harnessing the potential customer base that Facebook can offer.