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The social networking giant Facebook Inc. launched its initial public offering (IPO) on May 18, 2012. The IPO was touted to be one of the biggest in technology in what media watchers called a "cultural touchstone". The offering was certainly the biggest in the history of Internet companies Facebook achieved a market capitalization of over $104 billion with the IPO.

The CEO and founder of Facebook, Mark Zuckerberg had long been averse to taking the company public and had successfully spurned many buyout offers. A number of technology firms and private investors did, however, have stakes in Facebook. When the number of shareholders went crossed 500, Facebook was forced to issue a public offering. The IPO was launched at a price of $38.

Right from the onset, Facebook's initial public offering was plagued by challenges. The NASDAQ suffered a computer malfunction in the opening hours of the IPO and millions of dollars from the trade were wrongly placed. Later it came to be known that the chief underwriter of the IPO, Morgan Stanley was also involved in trouble over the high launch price of the stocks. Some Facebook executives also faced charges of tipping off industry insiders with regard to Facebook's revenue figures before the IPO.

Within a month of the IPO, Facebook shares lost about 25% of their value. By September, the Facebook stock went down by over 50% the IPO value. In an effort to buoy sentiments the company declared that it would withhold 101 million shares, and CEO Mr Zuckerberg promised to not sell his personal holdings for a year. Currently, Morgan Stanley, have been fined a sum of $5 million by Massachusetts' securities regulators for failing to disclose revenue shortfall to the general public.

The Facebook share is currently valued at $27.71 (closing December 18, 2012 – NASDAQ)
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Last Updated on: September 30th, 2021