'Expectations are like mountains that needed to be scaled by the traveler called patience' said my grandparent when I was of age when there was ample time to listen to her fables. Well that turns true today with the Facebook (FB) bubble being pierced by the `no sight of immediate returns’ needle. Trading was oscillatory as the initial trading surged to 11 percent and some time before noon made an `U-turn’ back to the IPO price. However FB shares closed to 40.82 on the first day at NASDAQ with an initial growth of 8 percent.
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How the trade went on:
Starting off on $38 the first thirty second was tremendous, trading volume soared as 82 million of FB changed hands. And the shares soar to $ 42.05 per share. However later they again fell back to the original value, after traversing to dizzy levels of $45. Later the stocks stabilized to $40.82 by the end of the trading day.
Expectations of the FB:
The long expectations of the market analysts were that the IPO will open up to a massive levels of trading at the NASDAQ. However the realty was different. Most financial analysts felt that the trading would surge to dizzy levels and at closure the bookmark would be around $50 dollars. That simply meant that the shares would surge by 76 percent.
Why this chaos of FB:
The Facebook Inc initial public offering (IPO) opened on 18th May after the FB CEO Mark Zuckerberg flanked by Chief Operating Officer Sheryl Sandberg and NASDAQ Chief Executive Robert Greifeld, rang the bell to kick off trading at the company's headquarters in Menlo Park, California (Silicon Valley) at 6:30 a.m. Pacific time. The IPO of the eight year old social networking giant is considered as the one of the biggest initial public offerings in U.S. history, pegged at $18.4 billion. It is the second largest IPO and just behind Visa, but the largest in the internet segment. It may be well admired the share price pegs FB market value at $104 million, making it bigger than Starbucks and Hewlett-Packard together.
What went wrong:
As a matter of fact there was nothing wrong in the way the shares of the social networking giant were traded; the wrong was only in the beholder eye or rather the uneven market forecasts. It is a known fact that the global financial crisis and the US under growth in various sector, had made the investor quite conspicuous over the gains. Going with the crisis the investor tribes are slowly reacting as a matter of caution. Also concerns about FB long-term money-making potential added to the slow trade. The third thing was that the trade executive messages were delayed due to technical issues.
What Industry Pundits feel:
The cumulative analysis of the industry `gurus’ states, trading under these severe conditions is really not that bad. True the IPO has fallen short of expectations. However the growth was phenomenal in the given financial scenario. The closing price of the IPO made the stocks worth 8 percent more than the initial offerings. This only shows positive signs and the growth is imminent. (With Inputs from Internet- Aarkay)
