Feeds

$US38 share price values Facebook at US$104b

Each member worth about $115

  • alert
  • submit to reddit

The essential guide to IT transformation

Facebook has decided it is worth US$104b, valuing each of the shares that will go on sale early Friday US time at US$38.

The price means the company expects to raise US$18.4 billion or so, a lazy billion or so behind the biggest first-day fund-raiser of all time, Visa. It also means, if we round Facebook's member numbers down to an even 900 million, that the $104b valuation makes each member worth about $115.

Financial analysts expect the share price to rise on listing day, as demand for a piece of the company meant the $38 price exceeded initial expectations of $28 to $35. The nature of the initial public offering process means most shares were pre-sold to institutional investors, a situation which meant lesser investors were unable to get their hands on shares and will instead pay a premium to acquire the stock on the open market.

Just where the stock heads in the medium to long term is anyone's guess. Some analysts point to strong margins - last year's profit was $1b on revenue of $3.7b – as a sign of likely future growth. Others point to difficulties monetising users, especially when they access Facebook in the cramped environs of mobile devices. Nay-sayers also suggest Google made more money per user, faster.

Others point out that with $18b of cash sloshing around, Facebook will have all the money it could ever need to acquire companies or build technologies that will help accelerate its monetisation efforts.

The float is a big technology event unto itself, as US stock exchanges have reportedly tuned their systems for an expected deluge of trades. The Los Angeles Times reports the New York Stock Exchange has dedicated a server to the event and that NASDAQ has set up a dummy ticker for the company to test trades*.

For what it is worth, the big numbers generated by the float are, however, a drop in the ocean compared to those involved in the European sovereign debt crisis, as European Union members are in hock to a collective €8.2 trillion, according to the Guardian. Greece's debt, which is proving so burdensome to the planet, was estimated at €355.617b in 2011.

*A quick search of the NASDAQ site found links to “fb.nasdaqomx.com” which in turn linked to pages in Facebook's newsroom. One of those, at http://fb.nasdaqomx.com/Culture/Hacker-Culture-9d.aspx, yielded the rather curious screen grab below, which purports to be published in both the past and the future. Perhaps that's why investors are so excited.

Facebook from the future

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Kaspersky backpedals on 'done nothing wrong, nothing to fear' blather
Founder (and internet passport fan) now says privacy is precious
TROLL SLAYER Google grabs $1.3 MEEELLION in patent counter-suit
Chocolate Factory hits back at firm for suing customers
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Facebook, Google and Instagram 'worse than drugs' says Miley Cyrus
Italian boffins agree with popette's theory that haters are the real wrecking balls
Sit tight, fanbois. Apple's '$400' wearable release slips into early 2015
Sources: time to put in plenty of clock-watching for' iWatch
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.