Facebook Goes Public And Gets Rich - 5/18/2012

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May 18, 2012, marked a big day in the life of Facebook. For it was on this day, in history, the website would become a multi-billionaire. Facebook, which is currently the world’s largest network, held its initial public offering (IPO) and in turn raised $16 billion, on its first day. This would be the largest technology IPO in U.S. American history to date. Also it made Facebook the third-largest IPO in the United States only second to Visa and General Motors. When Facebook went public it had over 900 million registered users worldwide, and was valued at $104 billion.

In February 2004, Facebook, then known as “The Facebook”, was founded by a sophomore at Harvard University by the name of Mark Zuckerberg. But of course Zuckerberg did not act alone, he had help from his colleagues Eduardo Saverin, Dustin Moskovitz, and Chris Hughes. Initially, the site was created for Harvard students only, but due to popular demand the network extended to other universities in the United States. By mid-2004, Zuckerberg moved Facebook’s headquarters to Palo Alto, California, and by the end of year several noteworthy entrepreneurs had invested into the site and it had close to one million registered users. In 2005, the “the” was finally dropped and the site was officially Facebook.

Needless to say, as usership grew exponentially, Facebook helped to transform the way people communicated and shared information. The first ever politician to use Facebook as a campaign platform was Barack Obama during his 2008 campaign. Which eventually helped him get into the Oval Office chair for a second term. Activism has also been a large theme in Facebook usage. During the political uprisings in the Middle East known as the “Arab Spring”, activists utilized the site to share photos and videos of the atrocities being committed by their governments. Moreover, as of late June 2012, more than 80 percent of Facebook’s monthly users lived outside of the United States and Canada.

In 2010, Facebook found a new claim to fame, the silver screen. “The Social Network” was released that year and chronicled the 2004 lawsuit filed by Tyler and Cameron Winklevoss, Harvard Students who claimed Zuckerberg stole their idea for Facebook. Zuckerberg then countersued and in 2008, the Winklevosses agreed to $65 million settlement. At the time of Facebook’s IPO on May 18, 2012, Zuckerberg was already worth close to $19 billion. However, the IPO ended its first day of trading with shares at $38.23, which only slightly above the $38 IPO price. Needless to say, it was not a lucrative performance for investors. 

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