Few IPOs have garnered as much attention as social media giant Facebooks public offering on May 18, 2012. It was the biggest IPO in internet history, easily topping Googles IPO eight years earlier. Lets take a closer look at the IPO itself, as well as the payoffs to some of Facebooks early investors.

Begin by navigating to the SEC EDGAR Web site, which provides access to company filings: http://www.sec.gov/edgar.shtml. Choose Company Filings Search and pick search by Company Name. Enter Facebook and then search for its IPO prospectus, which was filed on the date of the IPO (May 18, 2012) and is listed as filing 424B4 (this acronym derives from the rule number requiring the firm to file a prospectus, Rule 424(b)(4)). From the prospectus, calculate the following information:

Use the data provided by Google Finance to calculate the following items:

A.Calculate the performance of Facebook in the three-month post-IPO period. That is, obtain the three-month holding period return an investor would have received if he had invested in Facebook at the closing price on the IPO day and sold the stock three months later at the closing price on August 17, 2012. Annualize the holding period return for comparison purposes.

B. Do similar calculation for a roughly three-year holding period (i.e., the 34-month post-IPO period) using the closing price on March 17, 2015. Again, express the performance in terms of annualized return.

C. How do these returns compare to the returns of a typical IPO?

Note: you can use the following formula to compute the annualized return: