In his first attention-getting action, Zuckerberg decided that Facebook will utilize the NASDAQ Stock Exchange – rather than the New York Stock Exchange – to list its shares when it goes public with its initial public offering next month. The social networking site will list its shares under the ticker symbol ‘FB.” While some major high-tech companies, such as LinkedIn and Pandora Media, have selected the New York Stock Exchange to list their public shares, others like Apple and Google have gone with NASDAQ instead. “It’s a high-profile win for their listings business,” commented analyst Michael Adams. “In terms of earnings, the impact won’t be dramatic, but it’s something to be proud of.”
Given the expectation that it will be the largest initial public offering since Google went public in 2004, Facebook’s IPO has attracted an unprecedented degree of interest. With 800 million users and $3.7 billion in revenue, Facebook has become the dominant social networking website and extremely popular with advertisers. The IPO could give Facebook an approximate value of $100 billion, and – with a possible offering of $5 billion – its new listing will be the largest in NASDAQ’s history.
Experts on the financial markets have noted that while NASDAQ is a fully electronic marketplace, the New York Stock Exchange is a hybrid model that combines a floor-based marketplace with an electronic marketplace. NYSE is generally considered a more global brand in comparison with NASDAQ, but it has a more expensive pricing structure than NASDAQ. While the latter was the primary choice for technology IPO’s to post their listings until several years ago, it has been facing increased competition from the New York Stock Exchange, which has spent significant effort to recruit promising Internet companies.
Zuckerberg’s second big move this week was his announcement that Facebook is purchasing the popular mobile photo-sharing service Instagram for $1 billion in cash and stock. This will be Facebook’s biggest acquisition to date, at least in dollar terms. “Millions of people around the world love the Instagram app and the brand associated with it,” Zuckerberg said, “and our goal is to help spread this app and brand to even more people.” The social networking mogul went on to say that “providing the best photo sharing experience is one reason why so many people love Facebook, and we knew it would be worth bringing these two companies together.”