Comparing Facebook’s IPO With Other Tech Companies

It’s Facebook IPO day, and the forecast for the stock sale is incredibly strong. Considering the service’s $104 billion estimated worth, which is based on said IPO forecast, chances are it...
Comparing Facebook’s IPO With Other Tech Companies
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It’s Facebook IPO day, and the forecast for the stock sale is incredibly strong. Considering the service’s $104 billion estimated worth, which is based on said IPO forecast, chances are it’s going to be a really good day for the Facebook crew. However, how does Facebook’s IPO compare to other tech company public offerings?

To be blunt, it doesn’t. Facebook’s $104 billion estimated worth is far beyond the likes of Google and Apple. Of course, Apple went public in the 1980s, so it’s no surprise their IPO was valued much less than the current tech giants. I’m sure the fact that Apple’s stock currently costs over $500 a share helps them rest easy.

As for Facebook’s initial value, the New York Times has an interactive chart that compares Facebook’s speculated IPO value to other tech companies, with Google’s serving as something of a benchmark. As you’ll soon see, Facebook’s IPO is much, much larger than any of the tech companies before it.

The first screencap shows where Google stands in relation to the tech IPOs that came before theirs:

Tech IPO Chart

But then, Facebook goes public, setting a new standard:

Tech IPO Chart

The next slide expands the chart on a logarithmic scale:

Tech IPO Chart

First-day pop is factored in:

Tech IPO Chart

The final slide is a little sobering if, for nothing else, the realization that over half of the tech IPOs don’t massively succeed like Google and Facebook. In fact, a great many of them have negative returns:

Tech IPO Chart

What’s the lesson in all this? Don’t go public unless you have a huge Internet following? Or remain patient like Apple, which also experienced a drop of 25 percent related to their IPOs value. Clearly, Apple has rebounded massively, but then again, they could very well be the outlier, not the norm.

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