Facebook floatation: Mark Zuckerberg becomes world’s 23rd-richest person

In the biggest initial public offering by a technology company in history, around a 1,000 people were made instant millionaires after shares in the social media phenomenon went on sale.

The flotation of the website, which has accrued nearly a billion users in the space of just eight years, immediately transformed the fortunes of several key investors, not least hoodie-wearing Mark Zuckerberg.

A dropout from Harvard who created the site in his bedroom in 2004, Mr Zuckerberg sold about 30 million shares, pocketing some $1.15bn (£724.6m), giving him both an estimated fortune of $19.1bn (£12.1bn) and the status of 23rd richest person in the world, aged just 28.

Other prominent backers of Facebook also saw their faith in Mr Zuckerberg’s creation reap dividends, including Bono, the lead singer of the rock band U2. Three years ago, the private equity firm of which he is co-founder, Elevation Partners, purchased around 2.3 per cent of Facebook’s stock for $90m. As a result of yesterday’s sale, however, that share became worth $1.5bn, and it is understood the Irishman will take home around a tenth of that sum.

After a slight delay to proceedings due to technical problems, the scale of trader interest was evident immediately after the shares went on the market shortly after 4:30pm UK time. Within the first 30 seconds, Nasdaq reported trading of no less than 82 million shares in the social media behemoth.

The first tranche were being bought for a healthy $42.05 (£26.62), well above the $38 initial opening price set by Facebook and its investors the previous day, and giving the company a value of $115bn (£72.8bn), greater than that of General Motors and Boeing.

Within 15 minutes, the price fell back towards the $38 mark before rising gradually to around $41.50 after the hour mark.

However, some onlookers expected the price to fall further, with Pivotal Research Group setting a target price of $30 for the stock. Brian Wieser, an analyst with Pivotal, said: “We are wary of the disconnect between revenue growth and operating capital expense growth expectations. The market is pricing Facebook as a less risky asset than Google, which we believe is simply not the case.”

Facebook’s owners released just under a fifth of the company’s total shares, about 421 million, which are expected to raise about $18bn.

One of the few profitable internet companies to go public recently, Facebook boasted a net income of $205m

Yesterday’s trading began in suitably esoteric fashion, with Mr Zuckerberg remotely ringing the bell to open the Nasdaq stock market in New York from his company’s headquarters in Menlo Park, California.

Surrounded by a crowd of wellwishers and Facebook employees, Mr Zuckerberg eschewed the sharp-suited uniforms of Wall Street for his trademark hooded top, wearing a broad grin for the assembled media.

Accompanied by Nasdaq’s chief executive, Robert Greifeld, he hugged Sheryl Sandberg, Facebook’s chief operating officer, and high-fived other members of staff.

Soon afterwards, he took to his personal page on Facebook to post a simple, one-line message. It read: “Mark Zuckerberg listed a company of Nasdaq.”