18 May 2012

Facebook valued at 117bn dollars

Facebook shares launch at 42 dollars and 99 cents a share despite concerns about the company’s long-term money making potential.

Facebook’s 28-year-old founder and Chief Executive Mark Zuckerberg rang a bell at the company’s Silicon Valley headquarters on Friday morning to kick off trading on the Nasdaq.

Valued at $117.7bn, Facebook is larger than Starbucks and Hewlett-Packard combined, sparking intense speculation about how much higher its valuation will rise once shares start trading.

Facebook priced its offering at $38 a share on Thursday, but the price rose to $42.99 a share – a rise of 13% – when trading began under the FB symbol on the Nasdaq, although within a few minutes it had fallen back somewhat.

Facebook employees marked the event with an all-night “hackathon” at the company’s Menlo Park, California headquarters starting on Thursday evening, a tradition in which programmers work on side projects that sometimes turn into mainstream offerings.

Read Ben Cohen's blog: General Motors is logging off Facebook adverts but the rest of us won't 

Founded in a Harvard dorm room in 2004, Facebook has grown into the world’s dominant social network with 900 million users.

For all the high expectations surrounding Facebook, the company faces challenges maintaining its growth momentum.

Some investors worry the company has not yet figured out a way to make money from the growing number of users who access Facebook on mobile devices such as tablets and smartphones.

Revenue growth from Facebook’s online advertising business, which accounts for the bulk of its revenue, has slowed in recent months.

Read more: Facebook's not only about money says Zuckerberg