Facebook went public on May 18, 2012, in what is now the largest tech IPO in history. Facebook raised $16 billion in an initial public offering, valuing the social networking giant at $104 billion, after pricing its shares at the top end of the scale due to strong demand.
The early days of Facebook as a public corporation were tumultuous, to say the least. Things got worse before they got (much) better after lacking the first-day jump that some investors had hoped for. Many IPO investors seeking for a quick profit jumped ship after the stock closed just over its IPO price of $38 on its first trading day, leading the share price to fall. Facebook’s valuation declined by roughly 50% over the next few months, and it took until August 2013 for the company’s stock price to rebound to its IPO level.
Investors saw that the company’s ad-centered business model was no fad, and that its pre-IPO acquisition of Instagram was perhaps the bargain of the century, and things generally went uphill for the social media behemoth from there. Despite some substantial failures – the company’s share price is up 433 percent from the IPO price – and a poor start to 2022, long-term investors who purchased into Facebook’s IPO have more than quintupled their initial investment with an average annual return of 18.9%.
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