Facebook IPO watch: Facebook (FB) stock opened at $42.05 per share on Friday then fell close to $38 per share for several times, on the brink of break compred with its IPO price. Facebook’s underwriters got involved in the stock trading actively, and substaintially bought the shares of Facebook to ensure that the Facebook stock price remained above $38 and avoid a break.
Facebook had set the IPO price at $38 per share with a financing goal of $16 billion. Facebook stock price closed at $38.23 per share, an increase of 0.6% compared with its IPO price. The massive hypes about Facebook IPO only brought in a tiny gain in the company’s share price. Also read: Facebook’s first day volume hit a new record in U.S. IPO history.
According to statistics, when Facebook stock price fell close to $38, there would have be millions of shares being traded. This phenomenon was not coincidence, there should not be so many investors choosing to buy Facebook stock at $38, in stead, the underwriters were making efforts to ensure Facebook stock price to remain above the IPO price.
According to the report of The Wall Street Journal, those underwriters had protected Facebook stock price step by step, as none of the investment banks would like to see this the largest technology IPO incur a break on the first trading day. It is not clear that how long the underwriters are actually going to protect Facebook stock price. With their help, Facebook avoided a break embarrassment in the first trading day but it may face a tough situation next Monday.
Also read: Lackluster performance of Facebook resulted in losses of some investors.