Facebook debut Friday on the Nasdaq stock market in New York disappointed. Shares of the social network closed lower and the trading start at 11:00 AM was missed because of errors that have delayed transactions and due to the huge value of the listing on the stock market, according to Reuters.
Facebook shares started trading late on Friday morning and opened 11% over the $38 price at which the IPO took place. After reaching a maximum of $45, traded under the symbol FB, the shares dropped quickly by the end of the session and closed at $38.23. Facebook attracted 16 billion dollars through the Initial Public Offering as the company’s market capitalization at its debut on the stock market reached 104 billion dollars.
Analysts anticipated that shares will close Friday on Nasdaq higher by between 10 and 50%, but disappointing debut will not seriously affect the social network. Market sources say the investment bank Morgan Stanley, the main underwriter of the IPO, was forced to buy shares on Friday to defend the $38 level of the Facebook listing. Many experts anticipate that pressure on the exchange quotation of the company will continue next week.
Facebook embarassing incidents on the NASDAQ listing
The opening was delayed. The stock exchange operator was not able to face the huge volume of orders and confirmation orders during the session was done with long delays. U.S. Securities and Exchange Commission announced it was analyzing the situation. Analysts believe Facebook modest beginning was caused mainly by the high price chosen by the company’s for its IPO, but also by the huge volume of shares offered for sale, which probably had saturated the demand from investors. And there are those that have been pointing to the high market value for Facebook, too high for a company with revenues of $3.7 billion and profit of one billion dollars last year. Facebook market capitalization is higher than the cumulative value of IT giants HP and Dell.
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