Facebook's IPO one of the world's largest, prices at $38 per share

May 18, 2012

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New York, May 18: Facebook's initial public offering of stock is shaping up to be one of the largest ever. The world's definitive online social network is raising at least $16 billion for the company and its early investors in a transaction that values Facebook at $104 billion.

It's a big windfall for a company that began eight years ago with no way to make money.

Facebook priced its IPO at $38 per share on Thursday, at the high end of expectations. The IPO values Facebook higher than Amazon.com and other well-known companies such as Kraft, Disney and McDonald's.

Facebook's stock is expected to begin trading on the Nasdaq Stock Market sometime Friday morning under the ticker symbol "FB." That's when so-called retail investors can try to buy the stock.

Facebook's offering is the culmination of a year's worth of Internet IPOs that began last May with trailblazer LinkedIn Corp. Since then, a string startups focused on the social side of the Web have gone public, with varying degrees of success. It all led up to Facebook, the company that's come to define social networking.

"They could have gone public in 2009 at a much lower price," said Nick Einhorn, research analyst at IPO investment advisory firm Renaissance Capital. "They waited as long as they could to go public, so it makes sense that it's a very large offering."

Facebook Inc. is the third-highest valued company to ever go public, according to data from Dealogic, a financial data provider. Only the two Chinese banks have been worth more. At $16 billion, the size of the IPO is the third-largest for a US company. The largest U.S. IPO is Visa, which raised $17.86 billion in 2008. No. 2 is power company Enel and No. 4 is General Motors, according to Renaissance Capital.

The $38 is the price at which the investment banks orchestrating the offering will sell the stock to their clients. If extra shares reserved to cover additional demand are sold as part of the transaction, Facebook Inc. and its early investors stand to reap as much as $18.4 billion from the offering.

For the Harvard-born company that reimagined online communication, the stock sale means more money to build on the features and services it offers its 900 million global users. It means an infusion of funds to hire the best engineers to work at its sprawling Menlo Park, California, headquarters, or in New York City, where it opened an engineering office last year.

And it means early investors, who took a chance seeding the young social network with start-up funds six, seven and eight years ago, can reap big rewards. Peter Thiel, the venture capitalist who sits on Facebook's board of directors, invested $500,000 in the company back in 2004. He's selling nearly 17 million of his shares in the IPO, which means he'll get some $640 million.

The offering values Facebook, whose 2011 revenue was $3.7 billion, at as much as $104 billion. The sky-high valuation has its skeptics, who worry about signs of a slowdown and Facebook's ability to grow in the mobile space when it was created with desktop computers in mind. Rival Google Inc., whose revenue stood at $38 billion last year, has a market capitalization of $207 billion.

"There seems to be somewhat of a hype around the stock offering," says Gartner analyst Brian Blau. That, of course, is an understatement.

Facebook's IPO dominated media coverage in the weeks and days leading up to the event. Zuckerberg's hoodie made headlines as did General Motors' decision to stop advertising on the site and rival Ford's affirmation that its Facebook ads have been effective.

There are a few reasons for the exuberance. First, there's Facebook's sheer size and high profile. The company grew from a college-only social network created in Zuckerberg's dorm room at Harvard in 2004 to an Internet phenomenon embraced by legions of people, from teenagers to grandmothers to pro-democracy activists in the Middle East.

Secondly, it's personal.

"It's probably one of the first times there has been an IPO where everyone sort of has a stake in the outcome," Blau says. While most Facebook users won't see a penny from the offering, they are all intimately familiar with the company, so it resonates as something they understand.

And then there's CEO Mark Zuckerberg, who turned 28 on Monday. He has emerged as the latest in a lineage of Silicon Valley prodigies who are alternately hailed for pushing the world in new directions and reviled for overstepping their bounds. He counted the late Apple CEO Steve Jobs among his mentors and he became one of the world's youngest billionaires, at least on paper, well before Facebook went public. A dramatized version of Facebook's founding was the subject of a Hollywood movie that won three Academy Awards last year, propelling Zuckerberg even further into the public spotlight.

Though Zuckerberg is selling about 30 million shares, he will remain Facebook's largest shareholder. He set up two classes of Facebook stock, building on the model Google co-founders Larry Page and Sergey Brin created as part of the online search leader's 2004 IPO. The dual class structure helps to ensure that he and other executives keep control as the sometimes conflicting demands of Wall Street exert new pressures on the company.

As a result, with the help of early investors who've promised to vote their stock his way, Zuckerberg will have the final say on how nearly 56 percent of Facebook's stock votes.

True to form, Zuckerberg and Facebook's engineers are ringing in the IPO on their own terms. The company is holding an overnight "hackathon" Thursday, where engineers stay up writing programming code to come up with new features for the site. On Friday morning, Zuckerberg will ring the Nasdaq opening bell from Facebook's headquarters.



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News Network
March 25,2024

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A teenager who led over 100 people to safety during Friday’s terrorist attack at a Moscow concert hall, has been hailed as a hero. 15-year-old Islam Khalilov, who worked part-time in one of the cloakrooms at Crocus City, recounted the events of the tragic evening to the Ruptly video agency.

The concert venue situated just outside of Moscow was packed ahead of a performance by the Russian rock band Picnic, when a group of terrorists armed with assault rifles forced their way into the building. They fired indiscriminately at fleeing people and then set the concert hall on fire.

According to the latest estimates, the attack has claimed the lives of at least 137 people, with about 180 injured.

Khalilov told the video agency that “it was when people started running from the escalator, from the stairway” that he realized that an emergency was occurring. The teenager said that he was acting on “instincts” at the time and used his thorough knowledge of the premises to quickly arrange visitors’ evacuation toward another building within the Crocus City complex.

“I started shouting all across the foyer, all across Crocus City Hall - ‘Folks, there’s a shooting! All run to the expo!’ – and I was showing where they had to go and was helping everyone,” he explained.

According to the cloakroom attendant, “there was a stampede, and everyone was in shock at first. No one knew what to do and where to go.”

Khalilov added that he himself was running behind the entire group to make sure he had not left anyone behind.

The teenager admitted to being “really scared” all along, but still managed to make the right use the instructions he’d previously been given on how to evacuate patrons in case of an emergency.

He told Ruptly that, at one point, he had caught a glimpse of one of the terrorists.

“I saw one, [he was] bearded and in green fatigues, he was walking around with an assault rifle,” the teenager recounted.

He also recalled seeing a man getting fatally shot by one of the assailants, adding that he “can’t stop thinking about it.”

The 15-year-old said he doesn’t consider himself a hero, and that he was just doing his job.

Explaining what helped him overcome fear, Khalilov reasoned that “It’s better to sacrifice yourself than to let a hundred people die.”

After Khalilov’s feat had been reported-on by several Russian media outlets, his favorite football club, FC Spartak Moscow, invited him to a meeting where he was presented with free passes to their matches.

Popular Russian rap artist Morgenstern said he had transferred 1,000,000 rubles ($11,000) to the teenager – something that Khalilov has confirmed to media.

The leader of Russia's Muslims, Mufti Ravil Guynutdin, has announced that Khalilov would receive a medal for his bravery.

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News Network
March 28,2024

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Russia says it is "extremely hard to believe" that Daesh could have staged the recent hugely deadly attack on a Moscow concert hall that the country's intelligence and security officials have blamed on Ukraine and its Western backers.

Four gunmen burst into the Russian capital's Crocus City Hall on Friday and began shooting at the people, who were attending an event. The Takfiri terrorist group has allegedly claimed responsibility for the massacre that killed at least 143.

Speaking on Wednesday, however, Russian foreign ministry spokeswoman Maria Zakharova cast that claim into serious doubt.

"In order to ward off suspicions from the collective West, they urgently needed to come up with something, so they resorted to ISIS (Daesh), pulled an ace out of their sleeve, and literally a few hours after the terrorist attack, the Anglo-Saxon media began disseminating precisely these versions," she said.

The chief of the Russian internal intelligence (FSB), Alexander Bortnikov has suggested that not only Ukraine, but also the United States and Britain might have been behind the shooting.

The Russian Federal Security Service has also said the gunmen planned to travel to Ukraine, where they were to be welcomed as "heroes." The FSB said Western intelligence services aided the attackers.

Russian President Vladimir Putin has also suggested that Ukraine stood to derive benefit from the attack and that Kiev might have played a role.

He has said that someone on the Ukrainian side had prepared a "window" for the gunmen to escape across the border before they were captured in western Russia on Friday night.

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News Network
March 16,2024

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Ottawa, Mar 16: An Indian-origin couple and their teenage daughter were killed in a "suspicious" fire which tore through their home last week in Canada's Ontario province, police said on Friday.

A fire engulfed a home at the Big Sky Way and Van Kirk Drive area of Brampton on March 7, a press release by the Peel Police said.

After the blaze was put out, investigators located what was believed to be human remains within the gutted house, but the number of people killed couldn't be ascertained at the time.

The charred remains were on Friday identified as those of three family members: 51-year-old Rajiv Warikoo; his wife, 47-year-old Shilpa Kotha; and their 16-year-old daughter, Mahek Warikoo.

Police said that they resided at the address before the fire.

Peel police Constable Taryn Young on Friday said the fire had been deemed suspicious, the CTV news channel reported.

"At this time, we are investigating this with our homicide bureau, and we are deeming this as suspicious as the Ontario Fire Marshal has deemed that this fire was not accidental," the report quoted Young as saying.

"There's not much left to it," Young said when asked about the possible cause of the fire.

"Looking into something like that as a fire marshal, I'm sure it's very tough when there is not much left to look at. But we are exhausting all avenues," she said.

The deceased family's neighbour, Kenneth Yousaf, said that the family had lived on the street for about 15 years, and he never noticed any problems with them.

Yousaf said he was alerted to the fire last week by a family member, who heard a big "bang." "When we came out, the house was on fire. So sad. Within a few hours, everything was down to the ground," the report quoted Yousaf as saying.

In a press release, police said they are continuing to investigate the deaths of the three family members and urged anyone with information to come forward.

"The circumstances surrounding the house fire remains the focus of an active investigation, and anyone with information or video footage (dashcam or otherwise) is urged to contact Homicide detectives," police said.

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