Dumb it down
What's the deal with Facebook IPO and should I even care?
Facebook floated on the stock exchange today, but what are the implications and who's going to clean up the cash?
So what does IPO even mean anyway? Is it another of these cool acronyms that the cool kids are using?
OMG no, how could you even think that FFS? Indeed, forgive me while I LOL at such a preposterous suggestion.
IPO stands for Initial Public Offering, or the first sale of stock by a company to the public. From today, Facebook’s shares will be floated on the stock exchange, with a lot of people set to make a helluva lot of money as a result.
I’m on Facebook, will I make money?
Unfortunately, no. The people that will make money from this development are not the legions of Facebook users who stalk old female schoolmates and play Farmville all day, but the people who hold shares in the company, such as Bono.
Bono? He hardly needs the money. Plus, buying and selling shares doesn’t sound like the Bono we’ve all come to know and... slightly dislike.
It doesn’t does it, but it’s not with the change in his pocket that he can afford a new pair of designer sunglasses every day.
A couple of years back, Bono’s private equity firm, Elevation Partners, managed to snap up 1.5 per cent of Facebook for the massive sum of €156million. That stake is reported to have increased seven fold in the time since, however, meaning that the pontificating singer, or at least his private equity firm, is in line for a windfall of somewhere in the region of €1.2 billion.
€1.2 billion, that’s a spicy meatball...
Yeah, but it’s small fry compared to some of the other figures being bandied about. Facebook priced its IPO at $38 a share, which values the company at approximately $104 billion and will raise $16 billion, the largest ever tech IPO in history and the third largest ever behind Visa in March 2008 ($19.7 billion) and General Motors ($18.1 billion) in November 2010.
That’s all well and good but when can I get a piece of the pie? Buy, buy, buy, sell, sell, sell, I’ve watched enough Wall Street movies to know my way around the stock exchange...
Well, Mark Zuckerburg himself rang the opening bell opening the Nasdaq market at 9.30am Eastern time (2.30pm Irish time) today so get cracking, but you won’t be the only one wanting a piece of the said pie because the global demand for shares is said to be overwhelming.
So what does your man Zuckermajig get out of all of this anyway?
Very, very rich is what he gets. At the share price of $38, the 503.6 million shares and options Zuckerburg owns are valued at 19.1 billion, which pushes him above Google co-founders Larry Page and Sergey Brin to the 29th richest man in the world, a mere $46.9 billion behind Mexican business magnate Carlos Slim.
That’s it, I’m setting up my own social networking website, How about one where users interact using only 140 characters?
It’s been done. But I’m hearing Bebo is due a major comeback...