The debate and speculation is finally over and all that’s left now is the shouting. Late yesterday, Facebook announced that it executives would price its 421.2 million shares of stock at $ 45.00 per share, the high end of the range anticipated. At that price, Facebook shares would trade at better than 100 times its historical earnings.bat, while comparatively, Google’s was just 19 times, and Apple’s 14 times.
The Facebook weather last week Roadshow which has heated up demand for the shares which may have prompted the decision to price the offering at the higher end of the range. Analysts believe that the demand for the shares could outstrip supply certainly, however, according to the SEC statement which was filed yesterday, the company will provide an additional 53.6 million Facebook shares to its underwriters after the IPO is concluded.
Facebook, with its massive marketing efforts, has garnered world-wide attention from both the tech and financial communities, and has found significant support simply because it is so interwoven in more everyone’s online existence. Provided today’s IPO launch is the success that Facebook execs and their underwriters hope it will be, the social media giant will be written up in the books as having the largest tech-based IPO in history, having raised $ 16 billion.
Internet search giant Google, which has stood for eight years as a benchmark for other tech-based IPOs, only $ 1.9 billion raised during its initial public offering, and is now valued at $ 200 + billion. With the IPO launch, Facebook’s market value will be more than $ 104 billion. One analyst believes the Facebook IPO will be a slam dunk “ ” as the share price is sure to surge initially by some estimates, perhaps by 15% or even 30%, and further believes that that feel-good sentiment will carry over into the broader NASDAQ composite.
The combined effects of the euro-zone crisis and disappointing U.S. data sent all of Wall Street’s main indices lower yesterday? the DJIA was down 1.24%, the S&P 500 1.51% and the NASDAQ 2.10% lower. While sentiment is bullish on OpenBook’s NSDQ100 in the hours ahead of the Facebook launch. Some traders who had already opened long positions were caught flatfooted by the loss yesterday including trader NASDAQ’s wmanos, who we mentioned had several long positions opened as of yesterday and who took a huge hit on them as each hit its SL OpenBook trader miki4blu took a bearish position and earned a 79% gain yesterday? the trader’s 1-day P&L is at 12.7%.
While the NASDAQ’s opening bell rings at 9: 30 a.m. (EST), shares in Facebook (FB) won’t begin trading until 90 minutes later to allow the exchange and brokerage firms enough time to handle what is likely to be an incredible crush of orders. Most analysts, including eToro’s own Lior Alkalay, believe that the Facebook frenzy will be enough to carry the NASDAQ higher, not just for today but in the longer term and 3500 is not an unlikely scenario. Stock futures are suggesting that Wall Street’s downtrend could pause hrs, with NASDAQ futures earlier up by 0.3%.
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