Skeptics that thought Facebook’s IPO price of $38/share was perhaps too high a jumping-off point were proven partially correct today, as stock in the world’s social network finished its first day of trading only about $.23 above the offering price.
When the stock first went up for sale this morning — after glitches caused both a delay in the start of trading and communications problems throughout the day — it was selling at more than $42/share… for a few seconds.
Within 20 minutes, the price had dropped back down to $38.
It did bounce back, a bit, spending much of the next three hours trading at or above $40/share, before sinking back to the IPO level during the final final hour of trading.
While the fact that the price didn’t fall below the $38 mark means that investors believe the IPO price was a solid one, the inability of the stock to skyrocket resulted in a down day for stock values of social media companies whose fates are tied to Facebook.
From the WSJ:
Online games maker Zynga Inc. shares dropped 13% to $7.17 and have been halted after hitting a single-stock circuit breaker. The stock fell more than 10% in five minutes, prompting the halt…. LinkedIn shares were down 1.4% to $103.45, Groupon Inc. was down 5.9% to $11.68 and Pandora Media Inc. is down 4.1% to $10.09.
Facebook has only made about 20% of the company stock available in the IPO. Even so, with about 421 million shares sold today, the company raked in at least $15 billion from new investors.