After months of wild hype and speculation, social media giant Facebook finally went public this past Friday May 18th, 2012.
Much to the surprise of many analysts (many who expected the stock to double on its first day), and thousands of Twitter followers who crowdsourced their predictions to reach a final end of day stock price of $54, FB ended at $38.24 – just a few cents above the initial price it was set to open at.
This does not mean that there was no interest in the stock, as a matter of fact this was the single most heavily traded IPO in history with over 571 million shares trading hands… So many that several traders including Fidelity had to put stops on trading the FB stock due to being overwhelmed by all the trading – it’s just that it simply did not “pop” the way many people expected.
Regardless of the final stock price, after the IPO – Facebook still has a massive footprint nearing 1Billion users, and they reported $1B in profits for 2011.
Facebook Is Now Sitting on a Lot of Cash…
Add to that the $16B they’ve just raised in the IPO, and Facebook is in no immediate danger of running out of cash.
Still, while everyone is talking about Facebook and its IPO, no one seems to be paying attention to the real giant sitting in the wings looking at all the action unfold.
Google is Sitting on a Lot More Cash.
With an incredibly profitable business model, Google is currently sitting on close to $50B in cash, has gotten final clearance from China to acquire smartphone maker Motorola Mobility and is making serious headway in Google+ (said to be adding approx. 625K new users per day).
With all these factors at play and now that the FB IPO has failed to live up to all the hype, Facebook looks a lot more vulnerable today than it did last Thursday.
What are your thoughts?
Is this lukewarm Initial Public Offering reaction a chink in Facebook’s armor in its battle against Google for the future of the Web?
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