Facebook IPO, win or Fail?

As you may know, social media metrics affect SEO, so we’ve been following Facebook closely lately. Facebook is one of those rare initial public offerings that generated tons of excitement. It’s been talked about and rumored for months, and we now know the outcome. Like any highly anticipated build-up and day of reckoning, there are going to be winners and losers. This past Friday we were there to witness history, and Facebook didn’t disappoint

The Winners

  • Facebook, as a company
  • Early investors
  • Possibly, long term investors

Let’s take a look at the numbers

  • Over 505 million shares traded, the most ever for an IPO
  • Became the largest company by market capitalization to complete an IPO
  • Raised the 2nd highest amount ever for an IPO (about 16 billion)

The losers

These are incredible, record breaking numbers, so why did it get so much negative press? Let’s ask the losers.

  • Wall street bankers
  • NASDAQ

The stock price didn’t “pop” 10% as it was expected to. In fact, it slid back enough that the underwriters had to step in and buy stocks in order to prop up the price. Some blamed the malfunctioning stock exchange as part of the problem affecting the price. On the second day of trading, the stock was already about 10%.

While a huge jump in the stock price on the first day makes for exciting headlines, it only steals capital from the company issuing the stocks and raising money – thus defeating the more important purpose of an IPO. You may remember another social media site going public a few months ago, LinkedIn. They lost several billion dollars in what was wrongly deemed a “successful” IPO by some.

Bright future ahead

Facebook on the other hand will add 7 billion dollars to its bank account that it can use to make big acquisitions or other investments. Once again, Mark Zuckerberg has shown that he is a very shrewd CEO! He has already stated that, one of their few weaknesses, mobile, is his top priority. So surely that money will be put to good use.

Disclosure: We are SEO experts, not investors. This blog post is not meant as investment advice. We do not trade Facebook stock. 

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