Facebook stalls on IPO - $42.05 at open, closes just above $38

Facebook stalls on IPO - $42.05 at open, closes just above $38

After opening the trading bell at its headquarters at California, and a 30-minute delay pushing its expected 11:00am launch; Social networking website Facebook has officially become a publicly-traded company at 11:30am New York Time (or 1:30am Melbourne Time) at US$42.05 per share.

The delay was said to be because of an unexpected surge of retail investors – basically people, not corporations, who buy shares – trying to get their own stake in the company after initial indicators put the price at $42 or $43. In addition, reports were circulating that many were having trouble changing or even cancelling their orders ahead of the official start of the trade. According to CNBC, some 82 million shares changed hands within the first 30 seconds of trade.

Shares briefly gained at 11 percent to be at the $42 or $43 pricepoint, before quickly retreating to near the $40 mark – surprising many people. Within 20 minutes after trade, it dipped below $38 before recovering in the lunchtime hour. However, more people retreated before the close of the stock exchange – pushing the stock price down to $38.23.

That, however, is still up – ever so slightly – to the $38 asking price. Reports are also circulating that its underwriters made sure the price did not fall below $38 – which would be a very embarrassing start for Facebook.

Investors, according to CNBC and Bloomberg, are pretty much annoyed that it didn’t ‘pop’ like many other tech companies. However, it doesn’t indicate much if it didn’t ‘pop’ on the first debut – that was Wall Street trying to hype it as much as it can to get the price up so they could sell it on profit. Retail investors, however, appear to be looking to hold the shares for far longer.

Meanwhile, in the other tech stocks, it was basically seas of red. Zynga – hugely beneficial to Facebook – fell at least 13 percent during the day and was put on a trading halt. LinkedIn fell 5.65 percent to close in two digits, while Google also saw losses to close at 600.40 – 3.64% lower than yesterday’s trade. Many speculate that people were taking money from their investments and putting it on Facebook.

The financial markets were also down, due to fears of the US economy and the worsening European debt crisis that continues to plague the Eurozone.

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