Facebook shares end flat on Day 1 of trading
After rising to an intra-day peak of USD 45 apiece, the shares ended at USD 38.23, up only by 0.61 per cent from the USD 38 offer price.
Friday began on a promising note for Mark Zuckerberg and his team at Facebook as he rang Nasdaq`s opening bell amid great fanfare and cheering from the company`s Menlo Park headquarters.
All eyes were then set on Nasdaq where shares of the company with the ticker symbol `FB` were to begin trading at 1100 hrs. Soon after the start of trading, the stock price of USD 38, which Facebook had set as its offering price, remained "unchanged".
Around 1113 hrs, Nasdaq issued a system status update noting "a delay in delivering the opening print". When the stock did begin trading at a little after 1130 hrs, it rose quickly to the USD 42.05 level, up by almost 11 per cent.
During the day, Facebook stock touched a high of 45 dollars and low of 38 dollars. It has a market capitalisation of USD 104.81 billion. However, the optimism soon faded away as share price began falling back to the 38 dollar level.
Facebook closed its first day of trading with a stock price of USD 38.23, a disappointing level for an IPO that was touted as the largest ever by a technology firm. About 580.59 million FB shares changed hands on Friday. The Securities and Exchange Commission said later it would review the day`s trading, which was marred by long technical glitches.
The New York Times said orders were being filled by hand at one point. "As is our practice, staff will review the incident with Nasdaq to determine its cause and steps that will be taken to address it," SEC said.
The New York Times said Facebook`s lead underwriter Morgan Stanley requested a delay at 1100 hrs. Confusion ensued next as traders were informed that the company?s opening price was 42 dollar a share.
Orders failed to be executed, or in trader parlance, "print". Nasdaq too was telling traders to be on stand by. Bad news continued to plague Facebook`s USD 16 billion public debut as monitors of some traders at the stock exchange froze instead of reflecting a steady stream of orders for company shares, with some reflecting conflicting information.
Nasdaq was unable to deliver trade execution messages until midafternoon, leaving traders in the dark about whether their orders had gone through. Some traders did not get confirmation of their bids until after 1400 hrs.
The delay and reports that Nasdaq was encountering problems with entries and cancellations unnerved participants, said Sal Arnuk, co-head of equity trading at Themis Trading. It was then up to the lead underwriter and stabilisation agent Morgan Stanley to ensure that Facebook`s stock price did not fall below the 38 dollar level, which would have been an embarrassment for the company, which was boasting of a market cap of 104 billion dollars.