May 18th, 2012

Commodity Brokers – Facebook Inc. (FB) is set to start trading today after a record initial public offering that made the social network more costly than almost every company in the Standard & Poor’s 500 Index. (SPX)

Facebook sold 421.2 million shares at $38 each to raise $16 billion, a statement yesterday shows. That values the Menlo Park, California-based company at $104.2 billion, or 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.

That valuation also makes Facebook, co-founded in 2004 by a then-teenage Mark Zuckerberg, the largest company to go public in the U.S. Now the 28-year-old billionaire has to reward investors by squeezing more profit out of advertising, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

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