IPO of Facebook Inc. failed to pop, as technical problems
arose and massive sell-off erased nearly all gains by the end of the session. At
one point the price was up by 18 percent. Nevertheless, after a volatile
trading day shares closed at USD 38.23, just 0.6 percent above the IPO
price.
Experts consider many reasons for such an unsuccessful start.
One of the factors is a massive sell-off that hit the entire market in the
afternoon, causing the Dow Jones Industrial Average to drop 0.7 per cent and the
Nasdaq Composite Index to lose 1.2 per cent. Michael Pachter of Wedbush
Securities thinks that that market was not prepared for so many shares and that
50 million shares which were added to the offering on Wednesday, created a
supply/demand asymmetry. Some argue that shares were priced too high and did
not leave enough opportunities for an upside.