The Banking and Strategy Initiative

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FB trading to begin with a bang | Deal Insight (Facebook prices at $38)

The special arrangements for Facebook founder to ring the bell in Menlo Park outside his office for the opening bell of NASDAQ when FB tstarts trading by 11 AM were not the only thing marking the day today. Markets are not trading much in eager anticipation of the 11 AM launch of the first $100 B IPO from the digital age as lines rivalling the launch of iPad2 were reported in Menlo Park for the Opening Bell event. Times square is probably full too as even the Debt ceiling and the now $3B JP Morgan loss are forgotten by the market in anticipation of taking that call on where Facebook will trade. The opening pop had quite a few takers including us for beyond the $45 mark or more than 20% higher than its IPO price.

Short interest in the stock starts after 72 hours and secondary sales by IPO buyers probably after 6 months. But its anyone’s guess if the price will ever correct to pre IPO levels if the enthusiasm is any indicator. Networks have focused on the start of trading at 11AM with no other discussions since 8AM morning calls. Facebook currently has a $3.7 B annual revenue with revenue growth slowing from more than 60% to less than 20%. However, most people understand that the revolutionary change brought about by Facebook is more than an AOL mania that shortchanged America in the last decade or even Netscape.

Apple is up more than 2% even as Zynga trades down ahead of the open. Linked in was one of the only successful Internet only IPOs in the past rising to $89 after an okay first Day’s trade before the six month period ended and employees sold down the price on the NYSE


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