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Facebook Opens at $42, Valued at $116.6 Billion


Facebook shares started trading at $42 a share on Nasdaq around 11:30 a.m. Friday morning under the symbol “FB.”

The company’s 421.2 million shares offered to the public will now raise $17.7 billion, bringing its valuation to $116.6 billion.

The opening price comes after Business Insider reported earlier this morning that bids for the company’s stock were as high as €58.20, or $74 a share. Facebook’s stock had also occasionally traded higher in the secondary markets than its planned $38 opening price.

More About: Facebook, facebook ipo

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Facebook Share Open 10.5% Higher At $42.05

Screen Shot 2012-05-18 at 6.30.41 AM

Facebook shares opened at $42.05, a 10.5 percent increase from its final price last night at $38. This would value the company at $115 billion. While the price is going to fluctuate a lot today, there’s a crowdsourced bet from Twitter users on FacebookIPOClosingPrice.com that the company will close at a $54 price and a $135.7 billion valuation.

It’s currently trading at $40.26, a 6 percent increase that gives the company a $110 billion valuation.

Bloomberg noted a premarket offer for Facebook in Frankfurt was at $70. Another report from ZeroHedge has Facebook at roughly $101 a share, which would value the company at a $300 billion valuation even before the start of trading.

Yesterday, the social networking giant priced its IPO at $38 a share, at the very top end of its revised $34 to $38 price range. That makes it the biggest tech IPO in history. Facebook offered 180,000,000 shares of stock in the offering while early shareholders including Peter Thiel and Accel Partners are selling more than 200 million more shares. This is the biggest recent IPO since Zynga, which saw its shares pop 10 percent on its opening trade of $11, giving the company a $7.7 billion valuation.

CEO Mark Zuckerberg along with vice president of product Chris Cox, COO Sheryl Sandberg, and CFO David Ebersman rang the NASDAQ opening bell remotely from Facebook’s headquarters at 1 Hacker Way in Menlo Park, California this morning.


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Facebook’s Opening Trade Has Been Delayed On NASDAQ

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Facebook’s opening trade on NASDAQ has been delayed. We don’t know why, but we’re hearing mixed reports involving both unexpectedly high demand from retail investors and problems with canceling orders. As we explained in a post about 20 minutes ago, the underwriters of the deal are meeting and trying to set an opening price.

But because of unexpected changes in demand, it seems market makers are having issues settling on an opening price. They have the option of delaying the offering in five-minute increments until they can find a final price.

This is not terribly uncommon and it’s happened in very recent, popular IPOs like Splunk, according to Bruce Aust, who is NASDAQ’s executive vice president and head of the global corporate client group. Early word is that we’re looking at a $42 price, or a pop of just over 10.5 percent. That would give Facebook a $115 billion valuation.


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Need A Little Context On Facebook’s IPO? The Social Network Made More Money Than…

Screen shot 2012-05-18 at 11.06.09 AM

Today’s Facebook IPO is a momentous, historical occasion. It’s set to be the biggest tech IPO ever, and the third largest IPO in U.S. history, second only to Visa and General Motors. The company that was once just a glimmer in the eye of a Harvard student named Mark Zuckerberg raised over $16 billion yesterday as shares were gobbled up by hungry investors, and that $38 share price point is expected to increase as the stock starts trading around 11am today.

Do you know how much money that is?

That’s more than nine Google IPOs, the cost of buying Napster 132 times in 2008, and enough to buy Mark Zuckerberg plenty of executive hoodies — 266,266 to be exact.

And how did I calculate this madness, you ask? I didn’t. A new website just popped up titled “Facebook made more money than”, and it looks a helluva lot like a Facebook page (fittingly). The site is sourcing facts from the web to provide a little added perspective on just how much $16 billion is worth.

Check it out here.

Here’s one more for the road, just to nail down the nearly unimaginable sum in your mind:

The $16 billion netted by Facebook before the stocks begin trading is more than the value of 66 sets of Winklevoss twins.


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5 Ways Facebook’s IPO Affects Brands


Dave Kerpen is the CEO of Likeable, a social media agency that has worked with more than 200 leading brands, including Verizon and Neutrogena. He is author of The New York Times best seller Likeable Social Media. Dave also launched Likeable Community College and Likeable Local.

Facebook expects to raise as much as $16 billion through its IPO, securing its title as the largest tech IPO in history. Naturally, consumers are questioning whether they should buy shares and financial analysts are in a tizzy evaluating the company’s worth — likely valued at more than $100 billion.

But the real $100-billion question is this: What does Facebook going public mean for brands? Here’s the answer.


1. More and Better Ads


To ensure its stock price doesn’t fall and investors stay satisfied, Facebook has to experience significant and continuous revenue growth. To accomplish this, the platform is setting its sights on advertising dollars. That means a certain aggressive push for Facebook ads. Like its recent logout page ads and sponsored stories, Facebook will continue innovating in advertising with new ad formats and targeting capabilities. It’s a big win for marketers, giving far greater reach and hyper-targeting abilities. So get ready to hone in on your perfectly tailored audience.


2. Less Organic Traction


With a greater focus on ads, it will become increasingly more challenging for brand managers to fuel organic growth. Valuable, engaging content will always be vital, but without content working hand-in-hand with Facebook advertising, your brand will be unable to keep up in the social space. The days of brands getting significant traction on Facebook organically are over.


3. Additional Ad Money


Facebook’s IPO has been called a “watershed moment” for the industry. That’s because it truly legitimizes social media for businesses. As a result, C-level executives are going to be putting more money toward social media and marketing. There won’t just be more financial investment in Facebook, but more marketing investment, giving brands and marketers more opportunities to leverage social media the right way.


4. Diverse Buys


After an influx of cash, Facebook will have the ability to continue its spending spree and buy more tech companies to aid its commitment to sharing. (such as its recent $1 billion purchase of Instagram) By acquiring such sites — Pinterest, or Quora, perhaps — the platform will be able to expand features and grant greater opportunities to share content from Facebook alone. What does that mean for marketers? You can look forward to potentially streamlining your social media marketing plans. That would mean buying advertising on Facebook and Instagram together, for instance.


5. Fewer Changes


One of the greatest challenges for marketers using the Facebook platform has been the need to be agile, given Facebook’s constant updates to its products for users and brands. As a public company, Facebook may become less inclined to change its products as quickly as it has in the past. This means marketers and brands might be able to create opportunities for customers using Timeline, for instance, without worrying about Facebook’s next dramatic shift.

What do you think the effect of the IPO will be on the marketing world? Let us know in the comments.

Image courtesy of iStockphoto, AleksandarPetrovic

More About: brands, contributor, facebook ipo, facebook marketing, features, trending

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Facebook Hit With $15 Billion User Tracking Lawsuit


While most of Facebook’s employees are celebrating today’s initial public offering, at least a few members of its legal department are likely hard at work preparing to fight a $15 billion class action lawsuit filed on Friday in connection with the social network’s tracking of users’ online activity.

The lawsuit — filed in a San Jose, Calif. federal court — combines more than 20 similar cases from around the United States, according to Bloomberg.

The suit’s organizers are accusing Facebook of invading users’ privacy by tracking their movements online, which the site does via “like” buttons embedded on sites across the web.

“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” a partner at Stewarts Law US LLP, one of the firms leading up the suit, told Bloomberg.

Plaintiffs in the case are claiming that Facebook’s user tracking violates the U.S. Wiretap Act, which prohibits the “interception and disclosure of wire, oral or electronic communications.” According to the lawsuit, the Wiretap Act “provides statutory damages of the greater of $100 per violation per day, up to $10,000, per Facebook user,” which amounts to $15 billion for Facebook’s more than 800 million members in total.

SEE ALSO: Facebook Reveals its User-Tracking Secrets

The class action suit is the result of a decision made by a California judicial panel, which decided the multiple lawsuits should be unified and heard in Facebook’s home state.

Stewarts added that the firm is trying to find ways to add international claims to the U.S. lawsuit. Facebook’s privacy practices have recently come under heavy scrutiny in Europe.

Facebook’s shares were set to trade on Nasdaq at $38 each on Friday morning, raising $16 billion and valuing the company at just over $104 billion total.

Mashable reached out to Facebook for comment, but has not yet received a reply.

More About: Facebook, facebook ipo, privacy, US

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Twitter Wits Roast Facebook IPO


brooks




Click here to view this gallery.

In case you’ve been living under that metaphorical rock these past several weeks, Facebook‘s much anticipated IPO happens on Friday. The Facebook IPO will mark the final step in the evolution of Mark Zuckerberg‘s social networking baby, all the way from Harvard dorm room to publicly traded company.

Facebook’s (FB on the Nasdaq market) official IPO share price was officially set on Thursday. Hundreds of Facebookers will become millionaires once the stock becomes tradable, and many observers have ideas for how they can avoid common pitfalls of the newly rich.

Others have speculated that Facebook could — just possibly — become the world’s first trillion dollar company one day. Facebook co-founder Eduardo Saverin made news this week when it was revealed that he had renounced his U.S. citizenship, which helped him sidestep millions upon millions of dollars in capital gains taxes.

And then, of course, there are the folks who got out of Facebook at just the wrong time.

As IPO angst and anticipation crested Thursday techies, comedians, writers and everyday Americans took — ironically enough — to Twitter to weigh in and riff. Some jokingly lamented the effect a new crop of IPO millionaires would have on real estate prices.

Some poked fun at the company’s past foibles and potential for future failure. Others were just plain off the wall. Scroll through the gallery above for a few of Mashable‘s favorite tweets.

And if you’re still not clear just what exactly an IPO is or means, watch our video primer below to get up to speed for tomorrow’s action.


What Is an IPO?


What exactly is an IPO? What are the risks to a company in going public? What are the legal requirements?

If you find the business terms and market lingo confusing, check out our explainer video, which breaks down an IPO in plain language.

Thumbnail image modified, courtesy Robert Scoble, Flickr.

More About: Facebook, facebook ipo, Twitter

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4 Steps to Cultivating Online Trust


Wendy Lea is the CEO of Get Satisfaction, a customer engagement platform powering 65,000+ customer communities to help build better relationships with their customers. Follow her @WendySLea.

You’ve likely heard that the secret to building relationships with your customers is to “be everywhere your customers are.” As a result, you’ve probably signed up for a dozen social networks hoping that just showing up will turn out to be enough.

SEE ALSO: How to Maximize Your Facebook Engagement

But being everywhere is only the beginning. It turns out that online, just like in real life, the key to building relationships is trust. Cultivating trust online is tricky and takes work, but is by no means impossible. When you respond to your customers in the right way, you earn that trust and build the foundation for a real, long-term relationship. Here’s what you need to consider as you do that.


1. Acknowledge with Empathy


When it comes to earning trust, it’s not if you answer, it’s how you answer. Recognize the type of feeling your customer is having, and respond in an empathetic, emotionally intelligent way. The worst thing you can do is respond with the attitude that your customers are yet another problem to be solved. They will sense it. For example, if a customer tweets asking for help with a lost password, winning their trust might be as easy as adding an, “I’m sorry” or “that must be frustrating” to the response.

Also, when a customer has a good experience with your brand, amplify it. Thank them and then share their feedback socially. Not only do you validate their emotion, you also create the opportunity to connect with the members of your community that might have the same feeling or problem, but haven’t made it known.


2. Enable the Right Outcomes


Before they trust you, your customers need to know not just that you’ll hear them, but that when they raise concerns, they’ll see a resolution. That means enabling your customers to express their feedback in the place where it’s most productive for them, whether that’s Twitter, Facebook, product pages on your website, or anywhere else. In other words, your community needs to have multiple front doors under one roof.

In order for a customer to find a channel that works, you have to make sure that all the conversations people are having about your brand are accessible anywhere your customers are. From there, they need to be able to access information and conversations about products, customer service, and community. That way, your customers are able to find like-minded people and can jump in on any conversation on any platform.


3. Educate Through Experience


It’s not your job to tell your customers what the company values are. It’s your job to let them experience those values by bringing them into the fold of your brand’s community. That requires a system for archiving, organizing, and sharing conversations, the rallying point for your community of customers.

For Intuit’s TurboTax that means offering a robust library of help documents created by the company, but the site also includes a “Live Community” widget that invites people to get help from a community of tax experts and users. Every customer experience is converted to valuable insight that can influence prospects, customers, and onlookers alike. What’s more, the community is a testament to the brand’s values: Offering a DIY tax experience that’s accessible and easy for everyone.

Of course, you still need to produce and share content. It’s not time to ditch the company blog or stopping sending original tweets. It is time to recognize that the conversations within your community actually turn into knowledge. Ultimately, your community is a living FAQ.


4. Keep the Momentum Going


Once you’ve earned your customer’s trust, they’re likely to be even more engaged with your brand and product. That’s a good thing, but it means you’ll need to go above and beyond to continue building that relationship. To do that, you have to get to the point where the trust goes both ways and you trust the customer. Take Tyrel Hartman, who wanted to use the social discovery app StumbleUpon to propose to his girlfriend. Both were active Stumblers and often enjoyed exploring the site together, so Hartman contacted the company and requested that they rig his girlfriend’s account so that she’d stumble on a wedding proposal disguised as a blog post.

StumbleUpon’s team could have easily said no to Hartman, but instead, they were inspired by Hartman’s enthusiasm and explored a new use for their product. It required cross-departmental collaboration and an investment of resources, but it was also a priceless marketing opportunity that earned the company ample news coverage across the web.

Ultimately, real relationships are a two-way street, and your customers know that. Trust is the foundation of a relationship, but to keep that relationship going, you need to prove that you earned it, every day and everywhere.

Image courtesy of iStockphoto, mikkelwilliam

More About: contributions, customer engagement, features, online marketing

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Facebook Keeps Shipping. Silence Spammy Apps And More With New Notification Controls

Facebook Notifications Done

If there’s something on Facebook that won’t stop pinging you with Notifications, tell it to shut up instantly with Facebook’s new granular, in-line notification controls. Hover over an alert in the Facebook.com homepage’s globe icon drop-down and click the ‘x’ for the option to turn off notifications from that app, group, event, or post you commented on.

Facebook has confirmed with me this is an official new feature. Previously you had to dig your way to the dedicated Notifications Settings page, and there was no way to turn off a specific source of alerts — you had to silence all your events or all your posts.

As we accumulate more friends and apps, Facebook’s notifications can turn from delightful pointers to annoying distractions that interrupt our lives. These new controls mean if you want a more zen Facebook experience, you can make it so.

Now that some of us have been on Facebook for eight years, Facebook needs to be mindful of exhausting its most active users. These are the people uploading the photos, starting the groups, and throwing the events that engage everyone else that uses the social network more casually. It’s already moving in the right direction by offering notification summaries instead of individual emails

If power users become even a bit annoyed with how often Facebook alerts them to minor occurrences, and they don’t feel like they have tight control, they could drift away and stop generating as much content. That could have a ripple effect on overall time-on-site and engagement that could hurt Facebook’s ad business.

The new controls should be especially helpful for quieting noisy groups. One minute someone adds you to a group without your consent, and the next minute you’re getting dozens of notifications about weird music genres or lame club nights. Facebook recently made it much easier to find notification controls on group pages, but now you don’t even have to visit to shut off these alerts.

With the IPO tomorrow, it’s good to see Facebook launching new features today. It seems it’s really serious about the message plastered all over its headquarters. “Stay Focused & Keep Shipping”, even if you’re about to be a paper millionaire. And now it’s got a new poster for all the haters who are gonna hate on its new-found riches…


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Facebook’s $38 Share Price Makes Instagram Deal Worth Nearly $1.2 Billion

instagram-joke

Facebook’s $38 share price would make its deal to buy Instagram worth nearly $1.2 billion, up from the roughly $1 billion price the company announced in April.

That’s a nice little bump but the deal hasn’t gone through given regulatory reviews. On top of that, we don’t know the restrictions on the shares like when they vest or if they’re subject to lock-up period. Plus, shares may pop tomorrow and their value will probably fluctuate a lot by the time six-month lock-up date hits. When Facebook agreed to buy Instagram, it said it would pay with $300 million in cash and 22,999,412 shares of stock. That stock is now worth nearly $874 million, creating a $1.17 billion price tag.

Originally, Facebook said the deal was going to close by the end of June, according to its IPO filing. But now it appears that it may take longer because of a more thorough FTC investigation. There’s a requisite investigation if a deal is more than $66 million. But because of the more than $1 billion price that Facebook paid and the reach of both companies, the commission is said to be looking a little bit more closely at the deal, a source with knowledge of the talks tells us. The FTC usually doesn’t publicly confirm investigations until they’re over, and hasn’t publicly confirmed if they’re doing one on this deal.

But there is evidence that it’s taking longer than expected. Facebook changed its IPO filing earlier this month by amending a sentence projecting a second quarter close for the Instagram deal. It now forecasts a close sometime by the end of the year. If the government blocks the deal, Facebook has agreed to pay Instagram a $200 million kill fee, according to its IPO filing.

Because of this, Instagram’s dozen or so employees haven’t even started at Facebook. They’re still in limbo and they’re working from their San Francisco headquarters on the app, instead of Facebook’s Menlo Park office. Meanwhile, Facebook is also trying to improve its own mobile offerings; it recently boosted the size of photographs in the mobile news feed, making the overall experience more Instagram-like.

While the deal is ultimately expected to go through, a Facebook-Instagram acquisition poses several challenges for the FTC. For one, the FTC’s merger guidelines happen to focus a lot on pricing power, and how a merger would affect a company’s ability to raise prices and decrease output. But both Facebook and Instagram give their products away for free.

The other components of the FTC and Department of Justice’s guidelines have to do with market share. They’ll add up the square of different market shares for competing firms, creating a number called the Herfindahl-Hirschman Index. If it’s above 2500, then the market is highly concentrated. If it’s below 1500, then it’s unconcentrated.

But again, it’s not clear how this applies in a market where companies can rise and fall so quickly. Instagram basically appeared out of nowhere. It racked up nearly 40 million users in about 18 months. Plus, the time it takes for any given company to gain millions of daily active users is declining, partly because of the virality of the Facebook platform itself and then because the iOS and Android platforms are finally reaching scale.

So how do you apply a formula like this when changes in market share are so dynamic? The last time the FTC took a close look at a consumer web deal of this size, it was back in 2009 with the $750 million Google-Admob acquisition. The commission unanimously closed it after Apple entered the competitive field with its acquisition of rival mobile ad network Quattro, which became iAd. However, there hasn’t been a smartphone app deal of comparable size to Instagram — yet.


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