The much hyped Facebook IPO onto the Nasdaq is looking like a bit of a flop with shares initially rising to to $45 before dropping back towards the original $38 asking price and settling around $42 per share.
Well it’s a flop for those hoping demand massively outstripping supply would push the price up. Mark Zuckerberg, who opened Nasdaq trading today, still eschews suits and turned up for his biggest payday ever in a hoodie. He’s now listed amongst the richest 30 people in the world with a net worth around $19.1 billion dollars.
Facebook is valued at around $110 billion, about the same as Amazon and way more than companies like Disney. The big difference of course is that Amazon are a retail giant and Disney make films. Facebook make nothing. In fact investors are still trying to figure out how Facebook will ever make significant returns for them.
Adverts haven’t been a success on Facebook with a spectacular own goal when Facebooks sales people extolled the benefits of Facebook’s free Pages GM Motors agreed. Free Pages with free content seemed such a great idea that they cancelled their Facebook ads.
The biggest joke of all of course is that having sold about a fifth of the company Zuckerberg still retains 56% of the votes and effective control of the company. Having paid their 40ish dollars a share investors find that they have one vote per share instead of the 10 votes per share of the founders leaving them little if any say in how the company is run.
The only person that’s figured out how to profit so far from Facebook appears to be it’s founder and early investors. Mark Zuckerberg is a college kid done well!