Believe the hype: the Facebook IPO is even bigger than expected.
The social network made its long-awaited debut as a public company today, opening at $38 a share – the high end of its latest price range. With 421 shares sold, Facebook (Nasdaq: FB) raised $16 billion, making it the third-largest IPO in U.S. history behind Visa (NYSE: V) and ENEL SpA and the seventh-largest IPO ever.
That put the company’s valuation at $104 billion – 104 times last year’s earnings. And the Facebook IPO isn’t done rising yet.
With an hour to go in its first trading day, the stock was up 5.5% to just over $40 a share. That pushed its market cap up near the $110 billion range. At one point it was even larger, popping 18% earlier in the day.
Not surprisingly, volume is off the charts, with around 411 million trades.
The $16 billion deal is 51% larger than the company originally anticipated. Its initial plan was to sell 337.4 million shares at a price range of $28 to $35. Mark Zuckerberg’s company then bumped its expected IPO price range up to $34-$38 earlier this week.
Perhaps because the IPO price was higher than previously expected, Facebook shares aren’t quite getting the same first-day pop fellow social media stocks Groupon (Nasdaq: GRPN) and Pandora (NYSE: P) got last year.
But Facebook will be happy to avoid the same post-IPO hangover those companies suffered.