Well, Wall Street didn’t get the big ol’ Facebook smooch it was hoping for. After the highest volume of trading in the history of IPOs, Facebook closed a whopping 23 cents up from the starting price of $38.
I was watching the price rise and fall through the day, and it went over $42 at one point but eventually fell to its closing price. The market was apparently shocked about the tepid response, and the underwriters worked hard to keep the stock from falling even lower and possibly even closing below its initial asking price.
Most interesting of all, though, is how the trading impacted the other social media stocks out there.
According to the LA Times, sites like Zynga and Linked In saw a dip is prices on Friday as well.
“They were playing for a pop and didn’t get it,” said Michael Pachter of Wedbush Securities. For instance, he said, “the guys who own Zynga were hoping it was going to go up to $9″ from about $7.50 last week. “When it didn’t, they dumped it.” … LinkedIn Corp.fell 6%.Groupon Inc.was down 7%.YelpInc.dropped 12%. And Facebook’s gaming partner Zynga Inc. took the worst hit of all, shedding more than 13% of its value to close at $7.16.
It’s clear that well established investors don’t know what, exactly, Facebook will offer in the long haul financially. We’ll have to keep an eye on it, won’t we?