Stick a fork in the Facebook IPO, it’s done

I told you so. I told anyone who would listen yesterday that investing in Facebook’s IPO would be foolish and I was right. Facebook closed its high-excitement IPO day at $38.37 a share… mere pocket change over its initial price.

On Thursday, Facebook had priced its shares at $38, giving itself a valuation of $104 billion, and raising $18.41 billion. Too bad the market didn’t believe that valuation. Oh sure it may look like Facebook, which was to have gone public at 9:30 AM Eastern Time, but actually only started trading on the Nasdaq under the “FB” tickerat 11:00 AM EST, but the stock actually would have dived like the Titanic if it wasn’t for the the company’s 33 underwriters buying up shares to keep it afloat and above water at just over the $38 offering price,

Bullish, would-be buyers had predicted that at the end Facebook’s first day as a public company that the stock would be selling at $54 a share. So much for that pipe-dream.

Facebook started tanking almost from the start, After opening at $42.05 a share, a gain of almost 11 percent, the stock started on its way down. By day’s end, the only reason Facebook hadn’t declined below its opening price was that its underwriters kept buying massive blocks of the stock. And, buy it they did. Facebook, according to the Wall Street Journal (WSJ), had the highest volume of any IPO in history: 460 million shares by 3:07pm EDT.

So, how bad was it? Well Mark Zuckerberg and his cronies won’t be crying. They made out like bandits.

Source : ZDNet : Read the whole story here.