Facebook debut on Wall Street igniting up the expectations of the investors

Facebook the world’s No.1 online social networking site has raised about $16 billion making it one of the biggest initial public offerings or IPO in the American History. Rumors are rife with speculation about how much higher will the valuation goes up, once the actual trading begins. Facebook priced its offering at $38 per share on Thursday. But there is some amount of bullishness that is doing rounds as some expect that the price of the share would rise by about 30 percent or more on Friday.

Facebook is valued at $104 billion and is bigger than the combined valuation of Hewlett Packard and Starbuck Corp thereby raising higher expectations and speculation about its valuation when once the shares start trading under the FB Symbol at NASDAQ at around 11:00 AM Eastern Time. Facebook’s chief executive and founder Mark Zuckerberg is expected to ring the bell at the company’s Silicon Valley headquarters today morning to official commence the trading session on the NASDAQ.

Some concerns are being raised about the money making potential of the Facebook on a long term basis despite that an analyst at Morning Star estimates that the closing price for the Facebook could be $50 by tomorrow. The company’s shares basket consist of 421.2 million shares of common A stock including 180 million new shares that will be sold by the company and about 241.2 million shares sold by the existing shareholders such as Facebook’s founders and early investors.

All of the 421 million shares will be sold out at the offering price to those investors who satisfy the minimum buy in requirements. For institutional investors it is a question of millions of dollars. With the intense media attention, there is some hope for a real sales boom from automobiles to San Francisco Bay area real estate. With the high expectations from Facebook IPO, there are questions about how Facebook will maintain its growth momentum and face challenges as per the expectations of its investors.

A negative aspect that is being talked about Facebook is that the revenues growth from the Facebook’s online advertising business which is its major source of revenue has slowed down in recent months. Another bolt from the blue came with the news when General Motors announced on Tuesday that it would stop placing ads on the Facebook.

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