Fri May 18, 2012
Like It Or Not, It's Facebook's Day On Wall Street
Originally published on Fri May 18, 2012 1:03 pm
Facebook's much-publicized first sale of stock to the public started with a bang late this morning as the price per share jumped. But though the volume of shares sold was a record for an initial public offering, the stock's price gave up its gains as the day continued.
By the end of trading in the U.S., Facebook had settled right at the $38 initial offering price that had been set before shares went on sale.
Still, though the social media giant's stock didn't hold on to the gains it made immediately after going on the market, the interest from investors was obviously high.
"The volume of Facebook shares traded on Friday topped 485 million shares with nearly a half hour left to go. That easily tops the previous record for a new stock, General Motors, which had more than 458 million shares changing hands on its first day, Nov. 18, 2010."
And at $38 a share, the sale brought Facebook and its investors approximately $16 billion.
The social media giant's share price immediately rose from $38 to about $42.50. The 12 percent rise just after the 11 a.m. ET start of trading in the company's stock highlighted one of the most-anticipated debuts on Wall Street in decades.
Minutes later, the stock had settled a bit and was trading around $40 — still about a 5 percent gain over the initial offering price of $38.
Around 11:50 a.m. ET, it slipped back to about that $38 level. At mid-afternoon, the stock was trading around $41.25. With about 30 minutes to go before the close of trading in the U.S., it was back near $38 and stayed there.
Update at 3:30 p.m. ET. Underwriters Stepped In To Keep Price Above $38, Bloomberg News reports:
During today's trading, "Facebook's underwriters purchased the company's stock to keep it from falling below $38, people with knowledge of the matter said," according to Bloomberg News. "The bankers supported the stock amid Nasdaq's difficulties delivering trade execution messages, said one of the people, who asked not to be identified because the transactions are private."
Update at 1:45. p.m. ET. Trading Problems Reportedly Continue:
Brokers, such as Fidelity, are telling clients who attempt to purchase the stock that "certain marketplaces are experiencing slowness resulting in delays in execution for Facebook orders." The Wall Street Journal says trading problems "persisted after the open as traders had trouble changing or canceling orders."
Update at 12:05 p.m. ET. Disappointment?
"Make no mistake, this is a big disappointment. Facebook was supposed to be the catalyst that lifted all tides, especially in a very dicey market environment. The Dow has only had two up days this month as investors are fretting over Greece, Spain and the rest of the eurozone. Facebook was supposed to offer a glimmer of hope. Instead, the opposite has played out. Facebook shares are essentially unchanged. The Dow is trading at session lows, down 51 points. The tech-heavy Nasdaq is slumping even more, down about 1%. Oy vey."
But should any of that be surprising? As Gigaom writes, most digital media companies "have had a bumpy ride" on Wall Street.
Our original post and earlier updates follow:
Now, all everyone can do is wait for social media giant Facebook's first public offering of stock to hit the market.
Things will really get going, as The Deal Journal blog reports, around 11 a.m. ET.
That's when Nasdaq expects to release Facebook's 421 million shares for trading.
We'll keep an eye on how trading goes and update with news as the day continues. We're also embedding a widget that should let us track the stock (trading symbol FB).
-- NPR's Steve Henn wrapped up the news and previewed the IPO on Morning Edition.
-- There's a Facebook "timeline" here.
-- The New York Times put together an interactive graphic about how the Facebook IPO compares to other companies' debuts in the market.
Update at 11:30 a.m. ET. It's Trading; Opens Around $42.50 A Share.
Update at 11:18 a.m. ET. Still On Hold, And Some Are Concerned:
"This is getting a bit worrisome. Still nothing more than 15 minutes after Facebook was supposed to start trading," The Wall Street Journal's Steven Russolillo writes. "Nasdaq CEO Robert Greifeld told WSJ the exchange was 'well prepared' for the start of trading. We'll see."
Update at 11:02 a.m. ET. A Delay:
Nasdaq says trading in Facebook has been delayed at least five minutes.
Update at 10:45 a.m. ET. Anticipation Builds, Blogging Begins:
Various news outlets are firing up their live blogs. On its, The New York Times notes that Facebook's "$16 billion offering dwarfs the total capital raised by all I.P.O.s in the United States combined so far this year ($12.1 billion), according to Thomson Reuters data."
The Financial Times says traders expect to see "incredible volume today."
The Wall Street Journal's David Benoit is predicting the stock will open at $46.25.
Update at 9:35 a.m. ET. Zuckerberg Rings The Bell:
Facebook founder/CEO Mark Zuckerberg just set off the electronic bell that marks the start of NASDAQ trading for the day. But, remember, Facebook shares aren't supposed to hit the market until around 11 a.m. ET.