Morning Business Memo:
A feeding frenzy for Facebook stock is pushing the price higher for the year's hottest initial public offering. The social networking site that was started in Mark Zuckerberg's Harvard dorm room eight years ago is set to raise the price range for its IPO from $34 to $38 a share, putting the firm's value at more than $100 billion. From hedge fund managers to small investors, there's a huge appetite for Facebook stock.
The New York Times reports in Asia alone, the offering is said to be more than 25 times oversubscribed. "This is going to be the most talked about IPO," says Tim Stevens, editor of the tech website Engadget. But some analysts say the hype is totally overblown. Half of Americans think Facebook is a passing fad, according to the results of a new Associated Press-CNBC poll. Despite its huge popularity, profits have been relatively modest, and if the site boosts revenue by increasing advertising on its pages, there's a risk many users will unfriend Facebook.
Remember those dire forecasts of $5 gas by Memorial Day? Wrong! The US Energy Department says the national average dropped 5 cents a gallon to $3.73. And more price cuts are likely as the global price of oil keeps falling. Crude is down 11 percent since late last month. The one big exception to cheaper gas is the West Coast, where average prices are well over $4. Five refineries in California reduced production because of scheduled maintenance. The planned restart of a BP refinery in Washington state failed last week. Analysts expect the surge in prices to be short-lived as refineries return to normal production.
No big handout for the former CEO of Yahoo. The Internet firm refused to give Scott Thompson a severance package. The chief executive stepped down on Sunday after controversy over a lie on his resume. Don't feel too bad for Thompson. He'll keep a $1.5 million bonus and restricted stock valued at $5.5 million that Yahoo paid him when he joined the company to compensate him for benefits he gave up leaving his job running PayPal, the online payment service owned by eBay.
Stock market gloom was lifted a little by a report on Europe's economy. A strong export performance from Germany helped the 17 countries that use the euro narrowly avoid a recession in the first three months of the year. Eurostat, the EU's statistics office, reported that the eurozone economy was flat compared with the previous quarter. US Stock futures rose this morning.
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc