By Brendan Sasso - 05/18/12 03:05 PM EDT
After months of anticipation, social networking giant Facebook will begin selling shares on the stock market Friday in the third largest initial public offering in history.
The company's 28-year-old founder and chief executive, Mark Zuckerberg, rang the Nasdaq's opening bell from his Silicon Valley headquarters to kick off the day’s trading.
Zuckerberg posted a status update on his own Facebook page — “Mark Zuckerberg listed a company on Nasdaq.”
Facebook will raise $16 billion, trailing only Visa and General Motors as the largest IPO ever.
Under the symbol “FB,” Facebook stock opened at $38 per share. That price will value the company at about $104 billion, more than McDonald’s, Disney and Starbucks.
Facebook, which Zuckerberg founded in his Harvard University dorm in 2004, now has more than 900 million users worldwide, with about 188 million in the United States and Canada.
But to meet the astronomical valuation, Facebook will have to find ways to squeeze more value out of its users. Last year, the company pulled in only about $1 billion in profits.
The vast majority of Facebook’s revenue comes from advertisements targeted to users. The company says its advertisements are especially effective because it is able to tailor them based on users’ interests and habits.
But the level of detail Facebook collects on its users has also drawn the attention of some regulators and lawmakers.
In its filings with the Securities and Exchange Commission to go public, Facebook acknowledged that new regulations regarding online privacy could hurt its business model.
“Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection and other matters,” the company wrote. “Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, increased cost of operations or declines in user growth or engagement, or otherwise harm our business.”