At the close of the trading today, Facebook (NASDAQ:FB) priced its initial public offering at $38 a share, giving it a market value of $104 billion.
In all, the company is expected to raise $16 billion — good for the spot as the third-largest IPO in U.S. history behind Visa (NYSE:V, $19.7 billion in March 2008) and General Motors (NYSE:GM, $18.1 billion, November 2010). However, if extra shares reserved are sold too, Facebook could eclipse GM and raise $18.4 billion.
In light of all the hype, investors should be cautious tomorrow. As seen with other hot social deals — like Groupon (NASDAQ:GRPN), LinkedIn (NYSE:LNKD) and Zynga (NASDAQ:ZNGA) — investors would have gotten better valuations by waiting three to six months after the IPOs.
Investors considering getting into Facebook should first check out this piece, where I discuss the pros and cons of Facebook’s business, as well as the timing for a potential position in FB.
Check out InvestorPlace‘s special Facebook IPO section for more features surrounding the Facebook deal.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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