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Facebook raises $US16 billion, valued at $US104 billion in biggest ever tech IPO

Patrick Stafford /

Facebook has raised $US16 billion in its sharemarket debut, sending the company’s valuation soaring above $US104 billion as the company’s shares opened at $US42.05, up 10.5% from the opening price of $US38 during the biggest tech IPO in history.

Hundreds of Facebook shareholders, many of them employees, have now become millionaires overnight while co-founder Mark Zuckerberg has now become a billionaire. He sold 30.2 million shares reaping him over $US1.1 billion.

However, although shares traded as high as $US42, Facebook ended the day at $US38.23 when the market closed.

“Going public is an important milestone in our history. But here’s the thing: our mission isn’t to be a public company,” Zuckerberg said in remarks made before he rang the NASDAQ opening bell.

“In the past eight years, all of you out there have built the largest community in the history of the world.”

And in a move parodying the latest controversy over Zuckerberg’s dress code, NASDAQ chief executive Bob Freifeld presented him with his own commemorative hoodie.

While shares had initially been priced at between $US28-35, the company finally set a share price of $US38 earlier this week. It ended the day at $US38.23.

TechCrunch reports, from unnamed sources, that underwriters “got too aggressive” in the days before the IPO, limiting its first-day gains.

“There just wasn’t the institutional investor demand that people thought there would be,” the source said, adding that about 20% of shares are being bought by retail investors.

Several other investors reaped a fortune. Jim Breyer sold 38 million shares at $US1.4 billion, while PayPal founder Peter Thiel sold 7.7 million at $US292 million.

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Patrick Stafford

Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.

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