Countdown to the IPO of records: Facebook, or Face-book as many in Italy like to call the popular social network, will land at 17pm in Italy on the Nasdaq (11am in New York). The price was set yesterday evening at 38 dollars per share, at the top of the established range, and will raise 18,4 billion dollars in the IPO for a total value of the company of over 100 billion. A figure that even the grandiose Hollywood did not imagine when it shot the film on the founder Mark Zuckerberg, The social Network: in history it had gone as far as a billion dollars (“A million dollars is not right, do you know what is right?”, asked the protagonist of an investor in a scene from the film. The answer: "A billion"). Not only. A few years later, in reality, the real Zuckerberg refused a two billion dollar offer.
And today it lands on the Nasdaq with a 100 billion IPO, the first IPO technology and third overall in the United States after General Motors and Visa. As could be expected from the 28-year-old from Harvard, no institutional trip to New York, no suit for big occasions: in the usual hooded sweatshirt (a bit like Marchionne's legendary sweater) he will ring the Nasdaq bell from a distance, from its new headquarters in Menlo Park (California), fresh from a night of celebrations for the IPO. Party and champagne? Not exactly. A "hackathlon" session, an event where programmers work together on the projects they want to develop new ideas that could translate into concrete projects in the future.
It is said in circles that Zuckerberg would have wanted more, a price above $40,55 would have made it the largest IPO in the history of the States, but that banks and investors would have thrown water on the fire by advising caution. It's IPO fever on Wall Street: demand has been frenetic, especially from individual investors, the major brokerage houses have fought tooth and nail to ensure their best clients a slice of the IPO. Among the insiders there are staggering figures: an operator of Morgan Stanley, the advisor chosen for the IPO, spoke of 60 orders from 6.600 brokers scattered across 570 offices, when the normal numbers are 500 brokers from 300 offices . But for the majority of the ordinary retail audience, the real opportunity to put a chip on Face-Book will be with today's debut. And it seems that many are willing to do it at any price. The wait is therefore for a debut with a bang. Analysts are obviously divided, there are those who speak of a rise between 10 and 20% and those who say that a leap below 50% would be disappointing. But more than numbers, euphoria is a matter of guts, desire and hope to put a chip on a network phenomenon that promises an amazing future. “Shares will be traded on hope – commented not surprisingly by an analyst – but we don't know how to evaluate hope”.
Also because the retail investor base comes from those millions of people who use Facebook themselves, who have their own profile, post comments, collect images of their lives and who experience Facebook's relational revolution firsthand. Indeed, the strength of Facebook lies in the power of its network: since 2004 when Zuckerberg created it as a Harvard student, the network has expanded rapidly to US universities and from there it has conquered the world, first young people and then some everyone. There are now about 900 million Facebook subscribers, who share 46 billion pieces of content every day (photos, comments, links, invitations to events, games, messages). To give an idea, just say that half of the population of the United States is on Facebook and almost half of the English.
Even in Italy, where the Internet has a more recent and less widespread diffusion than Anglo-Saxon countries, the Facebook phenomenon is now rampant. And then there are the rapidly growing countries: Japan, South Korea, Brazil and India. In China Facebook is blocked by the government, but Zuckerberg seems to be preparing to arrive there too: the largest market in the world, made up of a young audience used to exchanging comments on communication platforms and blogs on consumer products and where the ecommerce is developing fast. Excluding China, it is estimated that 70% of those who use the Internet are registered with Facebook. A mass of users which means an impressive volume of consumer profiles, comments and social marketing. An example? The brand that aims to make itself known to a target of women between 30 and 40 who love to buy shoes, bags and accessories on the internet can buy advertising space that will be shown only to them. In addition to constituting a very powerful network of word of mouth and advertising on the tastes of the various users. By now practically almost all brands have a Facebook page, as well as stars but also politicians.
But if we talk about the IPO of records, it's also the IPO of doubts. With an initial capitalization that is already equal to 103 times the earnings of the twelve months at the end of March, some are raising questions about the real ability to make profits in the long term. Yes, because it is not mathematical that the great diffusion potential that has pushed the valuations to the stars will then materialize equally stellar profits. And there are those who raise doubts. Starting from the appeal that Facebook will continue to have for advertisers. Some numbers indicate, for example, that as many as 57% of those who use Facebook say they never click on the commercial content of the site while 4% do so often, a percentage not much higher than the rest of web advertising.
Some are already retiring: General Motors recently announced that it will no longer advertise on Facebook, after having invested 30 million dollars and realizing that those who use Facebook rarely click on advertising. Then there are the difficulties associated with business development in relation to mobile devices such as tablets and smartphones. Are we preparing for a new bubble? After the conquest of Instagram for a billion dollars against a valuation of 550 million dollars, for some delusions of grandeur and for others a brilliant move from a competitive point of view to take out a potential competitor who was growing at a dizzying pace, Zuckerberg certainly did not will remain stationary.
