Facebook IPO burns, Europe smolders

(MoneyWatch) Today is the Facebook (FB) coming out party. The IPO price of $38 a share means the company is worth $104 billion, the biggest-ever valuation by an American company at the time of its offering and the second-largest U.S. IPO ever behind Visa.

At the IPO price, Facebook ranks as the 23rd largest U.S. company, as measured by stock market capitalization (number of shares outstanding multiplied by the stock price) -- larger then Amazon.com and Cisco Systems, according to Capital IQ. It would be the 909th in terms of annual revenue.

Watch: FB ticker on the NASDAQ
Facebook prices IPO at $38 per share

Given that Facebook posted a profit of $1 billion and $3.7 billion in sales in 2011, the deal also means that the company will start trading at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential. Despite the rich valuation, the deal has captured investor interest and has been a lovely diversion from the more important story that could negatively impact the economy and global markets: Europe.

As Greece meanders toward a June election, the head of Greece's radical left party, known as Syriza, is talking trash to the austerians in northern Europe. Alexis Tsipras, the 37-year-old potential prime minister of Greece told the Wall Street Journal that if "but if they [EU, ECB, IMF] proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors."

These are tough words from the guy who is poised to win the most votes in the elections and will likely have a voice in the next government. The failure of Greece to secure a new government has reignited conversations about the country leaving the euro zone, a so-called "Grexit".

Anticipating a return to the drachma, nervous Greek citizens have withdrawn nearly 3 billion euros from local banks (about 2 percent of total deposits). The fear is that euros would be redenominated into the much weaker new drachma.

The European story is never about just Greece, though. There have been rumors of Spanish depositors acting similarly, though Deputy Finance Minister Fernando Jimenez Latorre denied those reports. Equally worrying was the fact that Spain was forced to pay much higher yields than expected when it issued bonds yesterday, underscoring the country's struggle to finance itself. Separately, Moody's downgraded 16 Spanish banks.

Just talk of a Greek exit is causing a massive loss of confidence in other peripheral economies, like Spain, Portugal and Italy and is making investors jittery. Remember, instability and unrest in Europe could affect the global banking system, including U.S. banks; U.S. exports and the U.S. economy; and of course, the stock market.

So sure, have fun talking about Mark Zuckerberg becoming the 29th richest man in the world, but don't lose sight of the real story that could impact your financial life.