It might sound a little strange claiming that a company which has just launched a huge IPO has in some way failed in its trading debut after making the social network more costly than almost every company in the Standard & Poor’s 500 Index.
Facebook shares closed Friday at $38.23–just 23 cents above its IPO price following a volatile session that had the shares up as much as 18% at one point, only to lose most of those gains by the end. The increase of six-tenths of 1% was a letdown for many seeking a big, first-day pop in Facebook’s share price. “This is like kissing your sister,” said John Fitzgibbon, founder of IPO Scoop, a research firm. “With all the drumbeats and hype, I don’t think there’ll be barroom bragging tonight.” At more than $100 billion, the valuation of Facebook equals the annual GDP of Morocco or Vietnam, countries that don’t top anyone’s list of economic powerhouses, but do actually produce some things of value. Can 900 million people, the roughly one-eighth of the planet that uses Facebook, be wrong?
Twenty-eight year-old Zuckerberg started the day by ringing the Nasdaq opening bell from company headquarters in Menlo Park, California. The weight of Facebook’s (FB) popularity seemed to bog down the Nasdaq in the initial minutes of the social network’s debut trading. It was exactly the kind of mania that made the dotcom era a profoundly silly time–irrational exuberance all the way to the bank in an era that became known more for the greed, ridiculousness, and excess than it did from the occasionally groundbreaking work that was changing how people did business at the dawn of the modern internet era.
Facebook Inc.’s disappointing public trading debut could have a ripple effect on everything from IPO valuations to venture capital funding in the months ahead, especially in anything related to social media. One day after [it] rolled out its much-anticipated IPO, some less-than-enthused analysts are already warning their clients against buying the social media site’s shares.
Facebook’s $104 billion initial public offering on Friday transformed thousands of young people into instant millionaires–as well as a few billionaires. The 503.6 million shares and options Zuckerberg owns are valued at $19.1 billion, making him wealthier than Google Inc. (GOOG) (GOOG) co- founders Sergey Brin and Larry Page. Sheryl Sandberg, 42, Facebook’s chief operating officer and former aide to U.S. Secretary of the Treasury Lawrence Summers, has a stake worth approximately $1.5 billion. Chris Hughes, cofounder of Facebook, is now worth $935 million. [Dustin] Moskovitz’s stake will be worth $4.8 billion [and] Sean Parker, Napster man and early Facebook president, has the third highest stake, [with] nearly 60 million shares in the company… worth $2.1 billion.
Even some of Mr. Zuckerberg’s enemies are now millionaires. Eduardo Saverin, the Facebook co-founder whose strained relationship with Mark Zuckerberg was popularized by the 2010 Aaron Szorkin film, “The Social Network,” offered his congratulations to his former partner… and posted a screen shot from the 2004 launch of the website, back when they were still students at Harvard and the site was still called “The Facebook.” Saverin has a 4% stake in Facebook worth more than $3 billion and recently stirred controversy by renouncing his US citizenship, just as the Facebook IPO would increase his personal wealth greatly (and subject him to US taxes). New York Democratic Senator Charles Schumer says Facebook co-founder Eduardo Saverin wants to de-friend the U.S. to get out of paying taxes, so he’ll be poking Saverin with new legislation. “It’s infuriating to see someone sell out the country that welcomed him and kept him safe, educated him and helped him become a billionaire. This is a great American success story gone horribly wrong.” To Saverin, Schumer said, the measure encapsulated a “status update for him: Pay your taxes in full, or don’t ever try to step foot in the United States again.”
And what of the Winklevoss twins, Cameron and Tyler (together known as the Winklevii), the upperclassmen who recruited Zuckerberg to work on their dating Web site, Harvard Connection, and later claimed that he stole their idea? The two, who Get Crackin’ for Pistachio Nuts, now have shares valued at about $300 million.
If you wanted to follow the Facebook IPO today and get the kind of crisp insight that helped you understand what was going on and maybe develop a few storylines, you wouldn’t have turned to Facebook itself, nor would you have stayed glued to CNBC, which seemed to playing catchup with…
Twitter! Although Facebook’s IPO was one of the most popular Twitter topics of the day, the number of tweets about it was low compared to the frenzy of public mourning on the day Whitney Houston died (6.3 million) or when the death of Trayvon Martin hit the mainstream (680,724), according to PeopleBrowsr, which looked at the peak days of big Twitter memes, [but did] surpass Anthony Weiner… the subject of 53,606 tweets one day last June as his scandal began to break out.
But even with all the Facebook IPO madness, Mark Zuckerberg updated his status Saturday to “married.” The surprise wedding to Harvard sweetheart Priscilla Chan was held in the leafy yard of his historic Palo Alto home Saturday evening, before about 100 guests who had thought they were there to celebrate Chan’s graduation from medical school last week. “Tell me when it’s time to say I love you,” sang Green Day’s Billie Joe Armstrong to the couple, under tall redwoods and sparkling white lights.
The couple met at Harvard and have been together for more than nine years. Zuckerberg gave Chan a ring he had made with a “simple ruby” although he could have easily bought her one of the world’s most expensive diamond rings if he wanted. We wish Zuckerberg the best on his journey with his lovely new wife. While he may not be able to fix any future relationship problems with an all-night hackathon or an algorithm change, we’re sure he’ll figure it out.
Adam L. Penenberg is a journalism professor at NYU and a contributing writer to Fast Company. Follow him on Twitter: @penenberg.
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13. David De Jong & Devon Pendleton, Bloomberg
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26. Pistachios Get Crackin’ Ad (video)
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