Facebook is now trading stocks on the Nasdaq with an initial public offering (IPO) Friday (May 18th) priced at $38. Mark Zuckerberg rang the opening bell today from Facebook’s headquarters in Menlo Park, California with high expectations that the price of the “FB” stock would soar on its first day of public trading.
After the bell this morning, the Facebook stock opened at $42.05. This was a good sign for traders early on because it means the demand for the stock is high, however there was no “big pop” in the price of the stock. Expectations that the stock would increase by 30% or more were swiftly extinguished after FB remained relatively flat during the first few hours of trading. While an increase of more that 10% was observed, the stock then fell back near Facebook’s opening stock price.
Many consider Facebook’s first day of trading a flop with a closing price just 23 cents above the initial $38. Realistically, the close of FB around its original IPO is a good sign that demand was met. While the stock price did not change much, the volume of Facebook trades on Friday was one of the highest for any IPO.
While Facebook’s venture into the public trading realm is surrounded by buzz of how the stock will fair, there is another reason for the social media giant’s IPO. When a company goes public the potential for growth is exponential. With public investments more readily available, Facebook will now have more capital to develop new products and make acquisitions. Facebook’s lackluster performance on Friday is just a hiccup in what is shaping up to be a very valuable stock.
Written by: Simon D. RubinTags: facebook, internet marketing, IPO, stocks