Mark Zuckerberg and Facebook had a big week last week with a mix of good news and bad. The week began with Zuckerberg’s birthday. The young billionaire turned 28 on Monday. On Thursday, Zuckerberg’s birthday present arrived as Facebook raised $16 billion in its initial public offering valuing Facebook at $104 billion. On Friday, shares of Facebook began trading at $42.05 but fell soon afterward, closing at $38.23, just 0.6 percent above the initial public offering price.
While investors may have to wait a while before experiencing any financial gain from their investments, Facebook executives and many share-holding employees have become instant millionaires and billionaires. The company’s 3500 employees are sitting on about $10 billion of the equity. Roughly 1, 000 employees have become instant millionaires (on paper at least). Mark Zuckerberg increased his worth by around $19 billion. It is expected that the influx of money into Silicon Valley will jump-start the next generation of entrepreneurs.
Facebook’s IPO was not without its challenges. Privacy advocates organized flash mob protests against Facebook on Tuesday at locations in New York and San Francisco over Facebook’s invasive privacy practices. Just prior to the IPO General Motors pulled its paid advertising from Facebook, an advertising campaign reportedly worth $10 million. The move caused many Facebook advertisers to question the value of advertising on Facebook. The NASDAQ suffered some trading glitches, Friday morning, as Facebook shares went public, as it wrestled with an extraordinarily high number of transactions. All of this, along with skepticism on the part of some Wall Street investors, kept the price of shares from taking off, turning the day into a bitter sweet win for Facebook.
It turns out that the public wasn’t that surprised by the luke warm reception Facebook shares received. Roughly half of those polled by the Associated Press/CNBC think Facebook is a passing fad. Only a third of those surveyed think the company’s expected value is appropriate, while 50 percent say it is too high.
But that’s not the end of Facebook news this week. A class action law suite has been filed against Facebook for tracking its users even after they are logged out. If guilty, Facebook could pay up to $15 Billion.
And for icing on the cake, Zuckerber announced that he has married his longtime girlfriend from Stanford, Priscilla Chan. The ceremony took place in Zuckerberg’s backyard with fewer than 100 guests. Zuckerberg gave up his trademark hoodie for a black suit and tie with a white shirt. The announcement was made, of course, on Facebook.
- Facebook CEO Turns 28, IPO Could Be $100B Gift [NewsFactor]
- GM Drops Paid Facebook Ads, Will Still Use Free Pages [NewsFactor]
- Companies Ask: Does Advertising on Facebook Pay? [NewsFactor]
- Facebook Policy ‘Housecleaning’ Leads to Protests [NewsFactor]
- Facebook Raises $16 Billion in I.P.O. [NYTimes]
- Facebook Closes at $38.23, Nearly Flat on Day [NYTimes]
- Historic Facebook debut falls flat [Reuters]
- RICH PICKINGS: Four challenges for Facebook’s new millionaires [Business Spectator]
- Cash from Facebook IPO Likely to Fund More Startups [NewsFactor]
- Facebook Gold Rush: Fanfare vs. Realities [NYTimes]
- Poll: Half of Americans Call Facebook a Fad [NewsFactor]
- Class Action Suit Looks to Squeeze Facebook for $15B [Ecommerce Times]
- Mark Zuckerberg Ties the Knot [NYTimes]