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
Local

Preachers rail at NYPD at Eric Garner's funeral

Preacher after preacher stepped up to the pulpit at a sweltering Brooklyn church on Wednesday to express fury at the city's police force during the funeral of Eric Garner, who…

Local

Newark schools probed after claims of race discrimination

The U.S. Department of Education said on Wednesday it was investigating complaints that a plan to reorganize public schools in Newark, New Jersey, discriminates against black students.

National

Dogs are capable of feeling jealousy - U.S.…

By Curtis Skinner(Reuters) - Dogs are a man's best friend, and research released on Wednesday says canines want to keep it that way.Dogs are capable…

Local

G train riders brace for five-week shutdown

G train service will be suspended between Brooklyn and Queens between Friday, July 25, and Tuesday, Sept. 2.

Going Out

Where to go drinking on National Tequila Day…

Thursday is just close enough to the end of the week to make you envision yourself already sunning on a beach towel or lounging by…

Going Out

Things to do in NYC this week: July…

Performing arts A 70’s Summer Night Friday, 6:30 p.m. The Green Building 452 Union St., Gowanus $35, 347-529-6473 Party like it’s summer in the 1970s…

Going Out

5 must-try dishes at Edible Manhattan's Good Beer

Rooting out the exotic amid the New York City bar scene is noble quest. But if you’d like to have it all come to you,…

Books

Art imitates life (almost) in David Shapiro's new…

David Shapiro talks about his book, "You're Not Much Use To Anyone."

NFL

Jerry Reese confident with Giants, skipping countdown clocks…

Last year, Giants GM Jerry Reese installed a countdown clock in the locker room to inspire Big Blue to play in their own stadium for Super Bowl XLVIII.

MLB

Brandon McCarthy finds his calling on Twitter

Yankees starter Brandon McCarthy joined Twitter three year ago for the same reason many people do: to get news quickly.

Sports

NBA great LeBron James sends 800 cupcake apologies…

By Kim PalmerCLEVELAND (Reuters) - NBA star LeBron James, whose recent return to the Cleveland Cavaliers in his home state of Ohio sparked a frenzy…

NFL

Fantasy football: Johnny Manziel could give your running…

Fantasy football: Johnny Manziel could give your running game a boost

Food

Recharge with a post-workout smoothie from Nicky Hilton

Some people can roll out of bed right as their alarm goes off. And that alarm isn’t set for 20 minutes before they have to…

Education

Colleges are increasingly embracing the concept of gender-neutral…

  Northwestern University recently made headlines after announcing that it would be installing two gender-neutral bathrooms in the university's student center. “These are two gender-open…

Career

How to prepare to interview for your dream…

    Congratulations! You landed a job interview at your dream company! A lot of hard work has gone into determining which companies to apply…

Style

The shirtdress is a summer must-have

  We love throwing on our boyfriend’s shirt and a pair of jeans (no matter how much he grumbles that it’s his turn to wear the…