Nick Abraham's discusses the Facebook IPO, video provided courtesy of ABC News 24.
Presenter: For more on the Facebook float I’m joined now by Nick Abrahams, technology Partner with Norton Rose, good morning Nick, thank you very much for joining us.
Nick Abrahams: Good morning
Presenter: It’s certainly been a hyped event with the listing of Facebook on the share market, the NASDAQ, how is that actually translated with the events overnight?
Nick Abrahams: Well, it was the true internet fairy tail with Mark Zuckerberg there at NASDAQ in his trademark hoodie, ringing the bell. They came on at $38 was the price, they went up to about 14% over that price but then dropped back at the close of the day to just a few cents over $38, so a very subdued start to Facebook trading.
Presenter: Have we seen characters such as Bono being made billionaires by this particular move?
Nick Abrahams: Yes that’s right, Bono has picked up a billion dollars overnight for his 1.5% and obviously Mark Zuckerberg is I think the worlds only 28 year old that’s worth 20 Billion Dollars.
Presenter: Is it actually worth those shares the 38 dollars or will we expect it to crash further back to earth?
Nick Abrahams: That’s the big debate if you look at Google shares when they came on four years ago they came on at $85, they’re now worth $650 a share so over 600% rise and so people are hoping that Facebook will go the same way.
Presenter: We’ve had a little bit of jitters and concerns leading up to the float with advertisers such as GM deciding to no longer run their advertising on Facebook, are we likely to see Facebook’s performance live up to expectations.
Nick Abrahams: There’s no doubt that Facebook does struggle to monetize its advertising to get its message out to the larger advertisers. So that will continue to be an issue for them, but the upside is certainly there they make 50% of their revenue now out of the US which is only 22% of their subscriber base so big opportunity there as well as in other areas such as virtual goods.
Presenter: And we’ve also had a lot of speculation of how this Facebook float compares with other tech companies that have preceded it, are we likely to see any more companies following suit with Facebook
Nick Abrahams: Oh I think so, there’s no doubt that right now silicon valley is in absolute boom times and so we will see far more IPO’s come on in the US and I think that will certainly trickle down to Australia and we’ll start to see perhaps the odd technology IPO down here as well
Presenter: Mentioning Australia what is this likely to mean for tech companies in Australia and in terms of investors out here in Australia
Nick Abrahams: Well I think the positive news for Australia is that US venture capitalists are looking far closer at Australia because everything in silicon valley is so overvalued and so we’ve had a number of recent acquisitions with excel partners, in fact they made $10 billion off the Facebook IPO, they’ve already done 3 investments down in Australia so I think it bodes well for Australian tech.
Presenter: Ok well thankyou, nick Abrahams thanks for joining us
Nick Abrahams: Thankyou
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