Friday, May 18, 2012

Traders "Like" FB

This will be my requisite Facebook (FB:  Nasdaq) post.  Every other pundit has made the world’s largest initial public offering the most talked about offering.  I cannot be left out.

Underwriters sold 421.2 million shares of Facebook, of which 180.0 million were new shares and 241.2 million were previously issued shares being sold by existing shareholders.  Facebook how has 1.35 billion shares outstanding, making the total market capitalization $51.6 billion.  These ARE big numbers!

It took Nasdaq several hours to open trading, leaving less than the usual six and a half hours of trading time.  However, traders made up for lost time.  By the end of the first trading day, FB had been “liked” 580.6 million times  -  the first day’s trading volume.  That meant the offering shares turned over 1.4 times in just a few hours.

Assuming all shareholders place their shares in brokerage firms, aggregate loan value in margin accounts increased $25.8 billion last Friday.  That is a number also worth noting.

Do not expect the intense scrutiny to let up next week.  Everyone will be watching to see if the FB share price can hold up.  I will be watching to see what FB shareholders do with their new found buying power.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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