6th Anniversary of FB IPO Shows Massive Rise in Prices
Last Friday was the most anticipated day for Facebook investors. Why? Because it’s the company’s sixth anniversary of its initial public offering, and if you had invested at that time, you would be reaping the substantial benefits by now. Facebook started its IPO with $38 price per share, last May 18, 2012, and it closed its trading at $38.23 on the same day.
The previous value of your $1,000 investment bought $38.23 since that day had dramatically increased for the next six years. Though the final price is a bit lower than the stock’s all-time-high closing price of $193.09, set on February 1, before the Cambridge Analytica data scandal sent the stock tumbling for several weeks. But it’s still an impressive increase.
Facebook’s First IPO
One of the main reasons why Facebook decided to offer its shares to the public was because they just simply reached its threshold of 500 shareholders. Facebook reportedly turned down a $75 million offer from Viacom last 2006, while Yahoo! attempted to buy Facebook for $1 billion in the same year.
That year, the valuation of the company sat at around $1 billion due to those two astounding business proposals. However, Zuckerberg turned down both offers.
Facebook did accept investments from companies, and these investments suggested fluctuating valuations for the firm. Last 2007, Microsoft was able to beat Google for 1.6% purchase stake for $240 million, this rose Facebook’s notional value at $15 billion just a year after.
Microsoft was able to purchase preferred stock, which meant that the company’s actual valuation would be considerably lower than $15 billion. However, the valuation plummeted down to $10 billion in 2009 when Digital Sky Technologies bought 2% stake for only $200 million. However, it rose back to $50 billion by 2011.
Zuckerberg wanted to wait to conduct an initial public offering, saying in 2010 that they were definitely in no rush. However, Facebook has been offering more than 500 round lots (or over 100 shares) to stockholders since 2012, causing the company to be subjected to SEC’s disclosure rules starting in 2013. Zuckerberg had no choice but to conduct an IPO to keep his company’s valuation and stakeholders.
History of Facebook
FaceMash, Facebook’s predecessor, opened in 2003. Developed by Mark Zuckerberg, he wrote the software for the website when he was in his sophomore year at Harvard. The main purpose of the website was for the Harvard Students to determine which among the females are prettier by typing “Yes” or “Not”. The website compared two female’s pictures side-by-side and picked who was prettier between the two.
Because of the game’s sudden popularity, it was quickly forwarded to the campus’ servers and it was shut down a few days after by the Harvard administration. The university imposed a sanction on Zuckerberg with expulsion. He was also charged with a security breach, copyrights violations, invasion of privacy. Ultimately, the charges were dropped, but that didn’t hinder Zuckerberg to continue working on the website.
He expanded his initial project when he created a social study tool ahead of his art history final exam. He uploaded all art images to a website, each of which was featured with a corresponding comments section, then shared the site with his classmates, and people started sharing notes.
A “facebook” is a student directory featuring photos and basic information. However, Zuckerberg noted that Harvard still doesn’t have universal facebooks online. The school only relies on paper sheets distributed as well as private online directories. Zuckerberg told the Crimson that while every Harvard student was anticipating to see a “Facebook”, it was ridiculous to think that a University would take years to implement such features when they have highly trained IT specialists to do it.
He claimed back then that they could do it better than they could, and he could to it in a week’s time. And so, he started writing the code for a new website (which we now call Facebook) last January 2004. He said that he was inspired by an editorial article about FaceMash. However, he put some twist by creating a centralized website that can benefit many users and is readily available to browse, search, edit, and delete information. On February 4, 2004, Zuckerberg launched TheFacebook, originally located at thefacebook.com.
More in Finance & Business
Here’s Why You Should Seriously Consider Refinancing Your Home Mortgage
If you’ve heard of mortgage refinancing but never really understood it, allow us to give you the simplest explanation for it...September 17, 2020
Basketball Sensation Dwight Howard Lists His D.C House on the Market
One of the most glamorous sports of all time is basketball. The sheer number of NBA fans across the world is...August 7, 2020
Big Budged: First Lady Melania Trump Has Some Reconstruction Plans Up Her Sleeves For Rose Garden
Melania Trump is ready to step into the limelight as a “traditional First Lady” with her recently disclosed plans of revamping...August 3, 2020
Legendary actor Anthony Hopkins Makes Huge Profit on the Sale of his Malibu Beach House
There would hardly be a movie buff who hasn’t watched, easily one of the most brilliant masterpieces of Anthony Hopkins, “Silence...July 29, 2020
Tristan Thompson Returns His Encino Mansion to the Market Less Than a Year after Buying It
It seems that flipping houses isn’t a hobby only A-list actors from Hollywood sport. Famous singers and even broadcasters like to...July 29, 2020
7 Must-know Property Investment Tips for Beginners
Real Estate investment is gaining a considerable amount of popularity as a means of passive income in the year 2020. Making money through investing in...July 29, 2020
After Two Years of Remodeling, Diane Keaton Finally Tosses her Tucson Desert Villa on the Market for $2.6 Million
The American actress, Diane Keaton, has a keen eye for aesthetics and real estate. Famous for featuring in all-time favorite movies like...July 22, 2020
Owning your Dream House isn’t Difficult if you follow These Simple Tips
For many people, buying their dream house is the most significant investment in life. While some start to plan for it...July 21, 2020
Did you know you could Trade in Real-estate Remotely?
One of the most disruptive changes Coronavirus has brought is the paradigm shift in global industries. Everyone is working through the...July 20, 2020