The world’s second-most popular social network — Twitter — goes public today. For months, experts and investors have been comparing the Twitter IPO with Facebook, using Mark Zuckerberg’s social network as the basis for what Twitter can do for success.
Already, Twitter appears to have had a much more successful first day than Facebook, but how will the first year go?
Facebook CEO Mark Zuckerberg talks with TechCrunch Founder Michael Arrington at TechCrunch Disrupt. Photo by Courtney Rundles.
In a wide-ranging interview with TechCrunch founder Michael Arrington Wednesday at Disrupt in San Francisco, Facebook CEO and Co-Founder Mark Zuckerberg talked about how going public made the company stronger, how Facebook is still focused on Home, and criticized the U.S. government for its handling of the National Security Agency leaks.
Those who own a part of Facebook gathered Tuesday at the company’s shareholders meeting to ask about the future of the company, the direction of Facebook’s stock value, as well as other concerns. Co-Founder and CEO Mark Zuckerberg addressed concerns about the company’s stock, asking for patience from shareholders who bought stock during the company’s initial public offering (IPO).
Several of the investors who spoke at Tuesday’s inaugural shareholders meeting were unhappy with the way that Facebook’s stock has performed since launching at $38 per share.
Facebook has announced that it will be holding its first annual stockholder meeting on June 11th. The meeting, taking place at the Westin San Francisco Airport, will welcome shareholders that have purchased stock before April 16, on a first-come, first-served basis. The meeting will also be broadcast via webcast to anybody that might want to sit-in the meeting.
In attempts to improve communication with investors, the company has also been providing more content to its Facebook Investor Relations page, which was first created back in February 2012. The page currently has only 443 likes, but looks to see this number grow with increased awareness.
The first point to the meeting’s agenda is the election of Facebook’s board of directors. The letter to the shareholders asked for investors to reelect all existing board members with the exception of Jim Breyer who announced he would step down back in April.
The stockholder meeting will mark the end of the first year since company’s IPO. As share price continues to slide, down to $23.52 from $38 intial public offering, it has become increasingly important for Facebook to communicate their progress on improving the business and what steps it is taking to improving its stock price..
Nasdaq fined for Facebook IPO - Nasdaq has been fined $10 million by the Securities Exchange Commission for alleged securities laws violations related to its mishandling of the Facebook IPO. The $10 million fine is the largest ever imposed against a stock exchange and comes into addition to the $62 million Nasdaq owes trading firms due to sustained losses during the botched IPO. Facebook’s IPO took place on May 18th, 2012 and was overrun with glitches preventing trades and orders from going through. Nasdaq has agreed to pay both fines without admitting or denying the accusations.
Waze integrates Facebook Events - Waze announced integration with Facebook Events. If a user has connected to the app with their Facebook account, the app will now provide directions to the event with a single click. Users do not need to know the address before hand to be directed there. The crowd-sourced traffic and navigation app also provides users with the ability to see the location and ETA of friends who have RSVP’d to the event. Facebook has been in talks of purchasing the app, but has talks have since broken down.
Sandberg speaks at D11 - Facebook COO, Sheryl Sandberg spoke at AllThingsD conference, D11, this past Wednesday. Her first return to the conference since 2008, Sandberg discussed Facebook Home, dropoffs in teen demographic, search and ad placement. She also discussed temporary sharing apps like Snapchat and the lack of trust in Facebook. Sandberg explained, “We need to be transparent about what’s happening on the site. We have always given you lots of options, when it comes to sharing, but it was too confusing. We are trying to simplify that, and make it more visual.” She added, “We don’t need you to share more to make our ad model work better.”
Facebook shares down 31 percent since IPO 1 year ago – Facebook shares closed today at $26.25, up $0.12 from yesterday but down 31 percent since the company’s initial public offering on May 18, 2012. Despite a new focus on monetization, particularly on mobile, Facebook hasn’t instilled confidence in investors in its first year as a public company. Many of its recent products, such as Gifts, Graph Search and Home, have launched to mixed reviews. And with all still in limited release, none has emerged as a clear source of future revenue. Still, Facebook has gone from having no ads on mobile to having mobile account for about 30 percent of all advertising revenue in the first quarter of this year.
Facebook users change profile picture show support for same sex marriage – As the U.S. Supreme Court met this week to address same-sex marriage, the Human Rights Campaign encouraged users to change their profile pictures to an image of a pink equal sign on a red background in support of marriage equality. Since then, the image and hundreds of variations of it have gone viral across the social network. Facebook’s data science team found that there was a 120 percent increase in profile photo changes on Tuesday after the HRC launched its campaign compared to the previous Tuesday. More stats are available in a note here.
Report: Zuckerberg gets political - Facebook CEO Mark Zuckerberg is reportedly involved in forming a political advocacy organization with other Silicon Valley executives, including Joe Green, co-founder of NationBuilder and Causes, who was Zuckerberg’s roommate at Harvard. The group is expected to work to influence issues related to immigration, education reform and the economy. Zuckerberg has reportedly pledged as much as $20 million to support the Super PAC.
Amazon buys Goodreads – Amazon this week announced its plans to acquire Goodreads, a social reading community and book recommendation platform that integrates with Facebook’s Open Graph. The service will continue to operate under the Goodreads name and its CEO Otis Chandler. Amazon reportedly paid $150 million for Goodreads, which has 16 million members.
PMD Marin Software goes public – Ad tech company Marin Software today went public after raising $105 million from an initial public offering priced at $14 per share. The stock opened at $19 per share and closed at $16.26. Marin began in 2006 as a paid search company, but was an early Facebook Ads API partner in 2010, and it continues to hold an ads badge as part of the social network’s Preferred Marketing Developer program.
Facebook updates mobile SDKs - Facebook this week released version 3.2.1 of the Facebook SDK for iOS and version 3.0 for Android. Both include a number of bug fixes and other improvements. The iOS SDK now supports frictionless requests without importing the deprecated headers. More information is available from the company’s developer site.
A U.S. district judge today dismissed four cases brought against Facebook by shareholders claiming the company failed to disclose material information ahead of its initial public offering in May 2012, according to Reuters.
U.S. District Judge Robert Sweet in Manhattan said the investors did not have grounds to sue because they were not Facebook shareholders at the time the alleged wrongdoing occurred. However, a number of other claims are still being brought against the social network, and the plaintiffs could file new “derivative” versions of their cases within 20 days.
Plaintiffs claim Facebook hid facts from investors and potential investors about how its growth projections would suffer from increased mobile usage. However, Judge Sweet said the company had indeed ”repeatedly made express and extensive warnings” about mobile usage trends and potential effects on revenue growth.
In a separate ruling, Sweet decided that a proposed class action against NASDAQ OMX Group for damages related to Facebook’s IPO should stay in his court. The plaintiff had wanted the case to be returned to the New York State Supreme Court. Investors say they suffered losses because of glitches in NASDAQ’s system on the first day of Facebook trading.
That case is In re Facebook, Inc, IPO Securities and Derivative Litigation, U.S. District Court, Southern District of New York, MDL No. 12-2389.
Facebook execs and board member sell some shares – With the end of an employee lockout this week, some top Facebook executives have sold portions of their shares. COO Sheryl Sandberg sold less than 2 percent of her shares for more than $7.4 million. Chief Accounting Officer David Spillane sold 256,000 shares, which is more than half his entire stake, raising $5.4 million, and General Counsel Ted Ullyot sold 149,075 shares, getting more than $3 million. Early investor and board member Jim Breyer sold $81 million worth of Facebook stock earlier this week. Breyer still holds more than 7.2 million Facebook shares. VP of Engineering Mike Schroepfer filed an SEC document today indicating that he is not selling any shares at this time. Facebook stock closed at $21.18 today, down nearly 9 percent from last week.
Facebook sued over Credits - Kickflip Inc., which does business as Gambit, sued Facebook this week over claims that the social network broke antitrust laws with its Credits program. Business Week says Gambit was the leading virtual currency and payment-processing provider to social game developers. Gambit claims Facebook’s decision to require Facebook Credits in 2009 destroyed a “vibrant and competitive market.” The case has been filed in federal court in Wilmington, Delaware. Facebook says the claim is “without merit.”
SEC to look more closely at Nasdaq compensation plan – The U.S. Securities and Exchange Commission has said it would extend proceedings to review Nasdaq OMX’s $62 million compensation plan following the exchange’s botched handling of Facebook’s initial public offering. Brokers say they collectively lost around $500 million because of issues on the day of the IPO, including delays in orders being put through and confirmations being returned.
FB underwriters spent millions to support stock on IPO day – Facebook’s underwriters may have spent about $66 million supporting the stock’s price on the day of the company’s initial public offering, according to a blog post by economists Thomas Eisenbach and David Lucca. The report explains how underwriters likely put in bids at $38 and $40 per share as the stock threatened to fall below the $38 offer price. This would mean underwriters spent about 40 percent of their underwriting commissions. “If this estimate is correct,” the economists say, “underwriters’ reputational concerns and obligations to the firm may have outweighed their short-run profit motive.”