Facebook (FB)

History of the Company

Facebook is now the most popular social networking site in the world. It was founded in 2004 for Harvard students and rapidly widened its reach, becoming available to Boston-area students, then all universities, then high schools, before finally opening to anyone over the age of 13.

Facebook began as a way to connect college students. Now, with a messenger app, games, ads, and more, Facebook is rapidly expanding with no signs of slowing down.

Facebook resisted making the company public for many years, and finally filed for an initial public offering in February 2012. Facebook began trading on the NASDAQ on May 18, 2012. It is one of the most successful startups of all time, with over a billion users.

Trading Facebook: What You Need to Know

  • Facebook’s much-anticipated IPO was the biggest in internet history. Strong demand had the initial offering price of the shares starting at $38. Two days before the IPO Facebook added 25% more shares due to high demand. The buildup was immense, but the opening would prove to be a disappointment. The share value fell in the first few weeks, with investors taking heavy losses amid technical glitches. Despite the disappointing and controversial IPO, the stock has done very well recently.
  • In 2014, Facebook announced the purchase of Whatsapp, a smart phone messaging application, for $19 billion. Analysts speculated about the purchase, citing Facebook’s desire to control a competitor that could pose a threat to their market value.
  • While experts have claimed that there are flaws in Facebook’s advertising model, the company is proving them wrong, with quarterly results beating estimates and more than half of its ad revenue now coming from mobile devices.
  • Despite the fact that prices are climbing and forecasts are good, a study based on the history of MySpace says that people will soon begin abandoning Facebook, and that it could lose up to 80% of its users. Whether Facebook will begin to fade or if it will maintain its hold on the market remains to be seen.

Anyone who wants to trade Facebook stock should carefully analyze the market conditions before trading.

Trade FB