Mendoza School of Business

Facebook IPO: What They’re Saying

Published: February 2, 2012 / Author: Damon Poeter

An initial public offering like Facebook’s doesn’t come along every day, or even every decade, and you better believe folks are talking about it. The social networking giant’s $5 billion IPO filing revealed a ton of previously unconfirmed data about the company, including how it makes its money and how much it’s been making, who and what it fears going forward, who owns how much of it, and much, much more.

Let’s take a stroll around the Internets and see what’s being said about the biggest and boldest Web 2.0 IPO to date.

The Big Picture

Facebook’s S-1 filing was a “brilliant move,” according to Tim Loughran, a finance professor at Notre Dame who has previously analyzed the initial offerings of Zynga, Groupon, LinkedIn, and other social media companies. Loughran thinks the company’s IPO valuation of “only $5 billion” should make Facebook “a very hot IPO in terms of first-day returns … $5 billion is not much to spread around to both retail and institutional investors (regardless of the offering price).”

Loughran also expects that a scarcity of shares will raise Facebook’s market value in the short-term and propel the company to conduct a follow-on offering later, which could attract “institutional players to take more meaningful positions in Facebook.”

To read the entire article visit: Facebook IPO: What They’re Saying


Topics: Mendoza