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

Pioneers for domestic violence push on

Reporter was commissioned to write this in-depth article. Two decades have passed since the O.J. Simpson trial captivated the country. But in the 20 years…

Local

Newest java joint in bastion of hipness is…

Little may represent the change the neighborhood is undergoing right now like the arrival of the first Starbucks. The chain which is ubiquitous in Manhattan, opened a Williamsburg store at…

National

Black and white are the new orange at…

By Brendan O'Brien(Reuters) - Black and white are the new orange in a Michigan county where the sheriff has made a wardrobe change for jail…

National

Traps set after reports of giant snake on…

New Jersey animal control workers have set traps to snare a reported 20-foot-long serpent slithering through the waters of Lake Hopatcong.

Music

Avey Tare's Slasher Flicks more accessible than Animal…

Believe it or not, Avey Tare — the man in the mustachioed mask pictured here in the pool of blood — may have made the poppiest music of his career.

Entertainment

‘The Leftovers’ recap: Season 1, Episode 4, ‘B.J.…

Last week’s episode of “The Leftovers” was apparently a fluke, because this week’s episode returns to focusing on the Garveys and it is so boring.…

Movies

Interview: Luc Besson says 'Lucy' is very different…

Filmmaker Luc Besson talks about his new film "Lucy," how it's different than "Limitless" and his crazy first conversation with Egyptian actor Amr Waked.

Music

Weezer releases first new song since 2010

Weezer releases "Back to the Shack," their first new song in almost six years.

NFL

'Vicktory dogs' travel road to rehabilitation seven years…

Of the dozens of dogs groomed by Bad Newz Kennels, 48 were rescued and 22 of the pit bull terriers have emerged at Best Friends Animal Society.

MLB

Yankees looking at trade for Cliff Lee, according…

Yankees looking at trade for Cliff Lee, according to report

NFL

Giants lineman Chris Snee to retire: Reports

The Giants report to training camp on Tuesday, but Chris Snee may not be there when they do.

NBA

Carmelo Anthony talks about his charity work in…

As he is used to doing every year, NBA All-Star Carmelo Anthony is going to visit Puerto Rico to do work for his foundation.

Tech

RocketSkates let users roll with a motor

Los Angeles company Acton has raised funds on Kickstarter to roll out a nifty alternative – motor-powered "RocketSkates."

Tech

Knicks star Carmelo Anthony becomes a tech entrepreneur

He's been an All-Star, an Olympian, and a celebrity spokesperson. Now NBA player Carmelo Anthony is adding the position "tech entrepreneur" to his resume. Along…

Tech

Ulises 1 is the world's first singing satellite

A group of artists and engineers in Mexico have unveiled Ulises 1, the world's first opera-singing satellite.

Home

Wallscape on a budget

Skip the wallpaper and ombre an accent wall instead.