Facebook IPO: A Buzz Turned on Few Likes on the Opening Day

Investors got their first ever peek for the social networking site on the stock market on May 18, 2012, twelve hours after its much-vaunted IPO that had valued the company around $100 billion. The IPO price was set at $38.00, and the closing price on the first full trading day (May 18) was $38.23, hardly a LIKE. However, for mature investors the lack of skyrocketing in share price may not be a bad thing, and to the contrary, may indicate a degree in stability and appropriate IPO pricing structures by the underwriters. The May 17, 2012, IPO involved 421 million shares, or roughly 15 percent of the company's stocks, and fetched $16 billion, of which Facebook had received $7 billion and early investors had received $9 billion. The other 85 percent is owned by the social networking site's founder Mark Zuckerberg, its executives, employees and early investors. In comparison, Google offered just 7.2 percent of its stock during its 2004 IPO.

Financials of Facebook
Facebook had net income of $205 million on the revenue of $1.06 billion for the first three months of 2012.
In 2011, it earned $1.06 billion on the revenue of $3.7 billion, compared to earnings of $606 million on the revenue of $2 billion a year earlier. That's a marked improvement from 2007 loss of $138 million on the revenue of $153 million. The company makes money mostly from the advertising, and a small share from the cut it takes from the users buying virtual items such as FarmVille.