Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
IN A FEW short weeks Facebook looks set to make history for the umpteenth time in its brief history.
The social network behemoth is not even ten years old but later this month it will float on the stock market for the first time – and speculation is high that it will become one of the most valuable companies in the world.
Over 337 million shares will be up for grabs when Facebook makes its initial public offering (IPO – the first time a private company sells stock to the public), in what the Financial Times has called ‘the most hotly anticipated share sale since Google’ in 2004.
Other internet companies have done well when they went public – most notably Google and LinkedIn – but Facebook is being seen as a test case for social media sites. There has been speculation simmering lately of another tech bubble, fuelled in part by Facebook buying Instagram for $1 billion last month, and the reaction to Facebook on the stock market is seen as an indicator of whether the market sees social networking sites as worth investing in.
The figures involved in the floation are huge. Last week Facebook estimated that the company could be valued at between $77 billion and $95 billion (€58 billion and €72 billion). In comparison, when Google floated in 2004 it had a valuation of $23 billion.
To put this slightly into perspective: Facebook is very likely to be worth more than the €85 billion bailout that Ireland received from the troika in 2010.
Facebook has put together this video featuring an unblinking Mark Zuckerberg which will be shown to potential investor firms this week. Much of the information is already known, but it also includes some key facts and figures about how big the social network is. Currently it has:
“It’s likely to be the biggest technology IPO ever,” says Gareth McCluskey, a portfolio manager at Davy. “It’s the first of the social media companies to float so there’s huge publicity around it and it will do well initially”.
Facebook, which will be listed on the Nasdaq, is expected to have a market value close to that of Amazon or Cisco Systems.
(AP Photo/Paul Sakuma)
All the signs are that there will be a huge take-up of shares in the company. Anticipation is high, and the Financial Times has suggested that Facebook will ‘pop’ on its first day – that the price will surge as people who don’t often buy shares rush to get a part of it (a bit like with Eircom in the 1990s but probably without the disastrous fallout afterwards).
There is precedent for that: Google led the way in major internet companies floating on the stock market in 2004 and has done increasingly well since then. LinkedIn has also done surprisingly well since floating last year; its starting share price was $45 per share in May 2011. By the end of its first day, the share price had risen by 109 per cent to $94.25, and it is currently trading at $106 a share (around €80).
There have been some warning signs with internet companies on the stock market, however. Deals website Groupon’s share price closed at a record low last Friday, at just $9.97 a share, down from a high of $26 per share, amid uncertainty over its financial model.
“There’s a lot of social media companies looking to float but it will depend on how Facebook goes,” says Gareth McCluskey of Davy. “This is going to be a real benchmark”.
(Photo: AP Photo/Richard Drew)
Short answer: yes.
Buying shares is relatively straightforward. “It’s very similar to opening a bank account,” says Gareth McCluskey.
For anyone who has never bought shares before, it requires setting up an account with a stockbroker. Usually this will involve giving your name, address, and other details, providing proof of ID and also proof of address. Some stockbrokers may charge to set up an account and the whole process can take a day or two.
Shares in Facebook are expected to cost between $28 and $35 per share (around €21 to €26). Technically you could buy just one share, but with commission and other costs involved it wouldn’t exactly be worth your while.
The good news: Facebook is going to be floated on the Nasdaq, which means the share price will be listed in dollars. Given the current exchange rate, this is good news for anyone buying shares from this side of the Atlantic.
The slightly less good news: A lot of the shares are going to be offered to the biggest clients of the giant Wall Street banks that oversee the stock sale – in other words, big investment firms will be prioritised over people who dabble in the stock market as Facebook aims to sell shares by the millions, rather than by the hundreds or thousands.
The New York Times has sounded a note of caution, noting:
The frenzy surrounding the Facebook public offering is reminiscent of the dot-com boom of the late 1990s, when investors clamored to get a piece of the next hot Internet company.
The exact date for when Facebook’s IPO will happen hasn’t been announced yet but the Wall Street Journal has reported that it is likely to be 18 May. Mark your calendars – it looks set to be a major day for the world’s biggest social network.
Note: The information in this article is intended as a guideline and should not be used as an authoritative source on any financial decision.
To embed this post, copy the code below on your site
Who makes this kinda stuff up? I really don’t understand the mentality of the type of people who would go out of their way to play on people’s fears with a view to stealing from them (information, bank details, whatever).
@lambda sensor: I agree, but if it is a text message it should have a source number so the telephone operators should be able to pass on the information to the gardai. I assume it is an offence to impersonate a government or state (or any) organisation.
Jail without access to the internet for the duration to these scam individuals. If coming from abroad then block the foriegn operators numbers from all texts and calls to Ireland
The telecom operators can be very quick to protect themselves but are lacking in protecting it’s customs. Bet they could stop all texts with the link in it and other scams but for some reason they seem slow to act. Yet social media platforms can stop the spread and remove stuff if needed.
@Niall Ó Cofaigh: There are many SIM card providers out there now so it would be very difficult to track things back to the source. With GSM cards being so cheap and easy to use plus the availability of GSM application SIM cards it is a very simple thing to setup a PC controlled system which will spit out messages all day. Those messages are not even sent from a standard off the shelf phone.
@David Corrigan:
If it is a foreign network, block the whole network and tell them to figure it out…
@David Corrigan: I have no doubt that they are almost certainly run from a device and not single composed messages in most cases and might be hard to trace back – ISP logs could help. But even if the guys could not be stopped the mobile operators could stop messages based upon content unless they have now encrypted plain text messages. We can then go to the ISP to block access to that link. Or do what they did in the USA, do a DNS redirected.
When telecom sites were replicated and phishing sites created to mimic them these sites were blocked or unhosted within 30 minutes – so it is possible to block access and prevent too much harm being done.
@Niall Ó Cofaigh: it can be configured in a way that you only see the name of the sender (the name they give themselves) like when you get a text message from your bank with a one time password to login. The sender in turn can be located abroad.
@Niall Ó Cofaigh: the whole world is seeing cyber theft and scams it is not unique to telcos that you allege ( wrongly ) that are sitting back and not taking action – there is an enormous amount of money and effort and resources spent by operators to try shut down scams – unfortunately once the the internet has been opened to all the smartfones then these challenges get more and more difficult – it is not as straight forward as blocking a call ( I work in this field )
Surely the network operators can block this fake information from circulating .
@Eug J Cummins: Would be next to impossible to do this.
@David Corrigan: block mass commercial texts that use the term HSE that are not from an authorised sender
@Eug J Cummins: They can (and used to many years ago) but wont now.
It would actually be straightforward, but would block advertising companies. These are sent by international SMS relays, and it would take 5 seconds to turn on a block if no number or name present.
Ah any close contact of a positive case would know this is fake . 24 days not one call from HSE. Luckily I contacted my contacts myself . Everybody in same circumstances should do it . If you know you’ve been exposed , contact the people you were with and tell them to quarantine and call their GP. Same if you’re a positive case . Otherwise it’s “ waiting for Godot”.
Those f@#£ers should be shot with balls of there own s#%T
have your say