This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook Frenzy Begins: First Trade $42 After Lengthy Delay

By Steve Schaefer

Almost everyone was expecting a first-day pop from Facebook, and the social network's first trade was certainly in that direction. Shares opened at $42.05, up 10.7% from the $38 initial public offering price, then retreated back to the $40 neighborhood on a surge in volume right at the start of trading

The first trade came more than 30 minutes later than the expected 11 a.m. open, and the Wall Street Journal reported traders had issues changing or cancelling orders.

Facebook shares were sharply higher in the first few minutes of trading, after launching the biggest U.S. technology IPO in history after the closing bell Thursday, raising $16 billion at a $104 billion valuation, turning many employees into instant millionaires and boosting the net worth of billionaire founder Mark Zuckerberg.

While there are plenty of concerns over Facebook's long-term value as an investment â¿¿ including the ability to monetize mobile use of the social network and Zuckerberg's controlling stake that could mean trouble if his interests conflict with those of other shareholders â¿¿ those were beyond the horizon Friday as the stock began trading.

The solid, but not enormous, opening gain indicated a well-priced offering that balanced supply and demand. Before th first trade there was not much of a halo effect elsewhere in the social media space, lending credibility to pre-offering speculation that the Facebook IPO could draw in cash from other technology stocks in what has been a weak market for the past six weeks. Shares of LinkedIn managed a 2% gain early but surrendered the entire advance to be down 0.4% before the first Facebook trade, while key Facebook partner Zynga was actually down 4.3% and Groupon fell 1.6%.

Google was up 0.5%, and the search giant's 2004 IPO and subsequent surge is an example many are citing as the closest precedent for the Facebook deal. Forbes' John Dobosz notes, however, that Google came public at a much lesser valuation than the social network that began trading Friday morning.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs