The day arrived. The time was 7 a.m. PT. I logged into Yahoo Finance a few minutes earlier to make sure I was watching the opening when it happened at 11 ET.
At 11 a.m. ET, Facebook became a U.S. public company. It is now Facebook (NASDAQ: FB)
For days the hottest search term online was “facebook ipo.” This was the event everyone was waiting for. There were hundreds of conversations about how the IPO would be astronomical, tons of stories for and against Facebook’s long-term business model and outlook, negative commentary on how Facebook didn’t really have a unique product and how most people never click on Facebook ads, anyway.
There were more stories, too, advising regular investors on how to buy stock when shares became publicly available and all manner of conspiracy theories regarding Facebook cofounder Eduardo Saverin’s move to Singapore and rununciation of U.S. citizenship — allegedly so he wouldn’t have to pay taxes on the billions he could receive for the two percent stake he retained.
It got weirder.
Just 24 hours before the IPO, General Motors pulled its advertising on Facebook. Bad timing. What was Facebook’s business model, anyway? Advertising? Data aggregation? In its S2, even Facebook was vague about it.
I expected day one to rally a huge glut of buying, finally bringing the NASDAQ out of its miserable slump. And other stock indices would advance beating the bears back. Here’s what really happened.
I was ready at 7:49 a.m. PT
8 a.m. Pacific …
8:10 a.m. PT. The plan was to take pictures of the indices every 10 minutes to document the impact of the Facebook IPO …
8:27 a.m. PT. Yahoo’s live blog was on. Yahoo mentioned the delay but didn’t offer any information on why.
8:35 a.m. PT. What gives? Still no sign of Facebook.
8:41 a.m. PT. And we’re off. It’s trading!
8:51 a.m. PT. One more shot of the indices before it soars.
9:02 a.m. PT. And …
9:26 a.m. PT. That 10-minute interval is stretching.
10:39 a.m. PT. I took the last snapshot. This sure wasn’t expected.
Despite all the hype before the IPO and the snide reports afterward, consider: More than 580,500,000 shares of Facebook (NASDAQ: FB) sold on Friday, May 18, 2012. Compare that with Google. It sold 22,351,900 shares on its opening day. Until Friday, General Motors Co. initial public offering held the record for biggest IPO with 458 million shares sold on opening day.
Friday was only the first day.
Facebook closed just a little higher than its $38 entry price, leading a lot of observers to say it fell flat. Far from it. The kind of volume Facebook saw on its first day indicates a lot of enthusiasm for the company and its promise.
Sure, it could be pure, good old-fashioned get-rich-quick speculation, but with 800 million active users, a lot of people still believe in Facebook.