Investors brace for Facebook debut on Wall Street

A monitor shows a welcoming message for Facebook's listing on the NASDAQ Marketsite prior to the opening bell in New York.

Investors are bracing for Facebook’s Wall Street debut on Friday after the world’s No.1 online social network raised about $16 billion in one of the biggest initial public offerings in U.S. history.

Valued at $104 billion, Facebook is larger than Starbucks Corp and Hewlett-Packard combined, sparking intense speculation on how much higher its valuation will rise once shares start trading.

“A 15 to 20 percent pop is in the realm of possibility,” said Tim Loughran, a finance professor at the University of Notre Dame. “Given they already moved their IPO range up and increased the size, that’s bullish to begin with.”

Facebook priced its offering at $38 a share on Thursday, but the price could be higher when shares begin trading under the FB symbol on the Nasdaq at around 11 a.m. Eastern Time.

Some expect shares could rise 30 percent or more on Friday, despite ongoing concerns about Facebook’s long-term money-making potential. An average of Morningstar analyst estimates puts the closing price for Facebook shares tomorrow at $50.

The IPO, expected to mint more than a thousand paper millionaires at the company, has received wall-to-wall media coverage and sparked hopes of a boom in sales of everything from San Francisco Bay Area real estate to automobiles.

Facebook employees marked the event with an all-night “hackathon” at the company’s Menlo Park, California headquarters starting on Thursday evening, a tradition in which programmers work on side projects that sometimes turn into mainstream offerings.

Facebook’s 28-year-old founder and Chief Executive Mark Zuckerberg was expected to ring a bell at the company’s Silicon Valley headquarters on Friday morning to kick off trading on the Nasdaq.

Founded in a Harvard dorm room in 2004, Facebook has grown into the world’s dominant social network with 900 million users.

At $38 a share, Facebook would trade at over 100 times historical earnings versus Apple Inc’s 14 times and Google Inc’s 19 times.

For all the high expectations surrounding Facebook, the company faces challenges maintaining its growth momentum.

Some investors worry the company has not yet figured out a way to make money from the growing number of users who access Facebook on mobile devices such as tablets and smartphones. Meanwhile, revenue growth from Facebook’s online advertising business, which accounts for the bulk of its revenue, has slowed in recent months.

“With mobile usage growth exceeding desktop, monetization in the near term could be reduced given little-to-no ad coverage on mobile, challenged by limited screen sizes,” said a report last week from Susquehanna Financial Group.

GM said on Tuesday it would stop placing ads on Facebook, raising questions about whether display ads on the site are as effective as traditional media.



News
Entertainment
Sports
Lifestyle
National

Bloomberg: Going green will grant you longer life…

Former NYC mayor Michael Bloomberg tells Metro that cities are where fighting global warming can make a difference, and increase people’s lifespan.

International

Ban Ki Moon: "Climate change is an issue…

My message to you is: make your voice heard and your actions count. Change is in the air. Solutions exist. The race is on. It’s time to lead.

Local

Earth Day New York food toolkits to help…

Hundreds of classrooms across New York City already have indoor container gardens that allow students to grow food right where they learn. But Earth Day…

Local

NYPD announces street closures for United Nations General…

The United Nations representatives are in town, and multiple city streets will be closed to traffic through Saturday, Sept. 26. The NYPD is urging those…

Television

10 Facts you won’t learn about Frankie Grande…

Frankie Grande is the worst and/or the best. Whether or not you're a fan, you'll want to know these facts about the polarizing player from "Big Brother 16."

Movies

Antoine Fuqua can kill someone with just a…

It's amazing what you can get done with the right tools. In designing the climactic battle in "the Equalizer," in which Denzel Washington's retired special…

Movies

Guess Ben Kingsley's worst filmmaking experience

Here's a fun game: Sir Ben Kingsley has made a lot of films since "Gandhi" in 1982, but at least one of them was a…

Books

Does Lena Dunham have any secrets left?

Get a sneak peek at her new book to determine if it’s worth the read.

NFL

3 things that went wrong in Jets loss…

The Jets have very little room for error with a far-from-explosive offense.

NFL

Eli Manning finally feeling good in West Coast…

The Giants have very little time before their next game, but they still took a moment to relish the team’s biggest offensive outburst since Week 1 of 2013.

College

College football top 25 poll: Oregon, Alabama close…

College football top 25 poll: Oregon, Alabama close in on FSU

NFL

Jay Cutler takes Marc Trestman's coaching to heart

While Jay Cutler turned to an autobiography on the man who would be his head coach, Trestman had personal experience with the player.

Wellbeing

Exercising leads to more drinking — and we…

  We’re rewarding ourselves with more than dessert on days we exercise, according to a new study. On days when people exercise more, typically Thursday…

Wellbeing

5 gadgets to protect you from sharks, concussions,…

The medical industry is inundated with devices looking after all aspects of your wellbeing, from monitoring your sleep patterns to warding off shark attacks. We…

Wellbeing

Narcissism and the ugly side of vanity

I have a friend who constantly talks about herself and rarely asks any questions about my life. She is constantly preening, obsessed with her body,…

Wellbeing

Lacking new ideas, Apple Watch disappoints health experts

Technology pundits were quick to predict the demise of most fitness wristbands and smartwatches when the Apple Watch was announced. But health care professionals and…