Facebook shares rise after $1 billion listing: report
Facebook has been slammed by some investors for its initial public offering of shares at $1.5 billion, which was later followed by an $8 billion sale of its stake in photo-sharing site Instagram to Facebook for $1bn.
Facebook shares jumped more than 8 per cent in premarket trading, while the market value of its $5 billion IPO rose by $1,300 to $5.27bn, according to data compiled by Bloomberg.
The news agency had earlier said that investors were “puzzled” by Facebook’s valuation of the Facebook stock, which is the third-largest in the US.
Investors have been disappointed that Facebook has not taken advantage of the fact that its IPO has a valuation of $5bn, said one investor, who asked not to be identified because the matter is confidential.
The company has raised more than $2.2 billion from private investors, with a majority of the funds coming from people like Facebook co-founder Mark Zuckerberg.
Facebook’s initial public offer (IPO) on Tuesday, which took place in New York, saw the company raising $8.2bn and sold its shares at a $1 per share price.
The company will now pay a $5-per-share dividend to shareholders.