By Eric Savitz
Well, the deed is done. Facebook, which priced its IPO at $38 a share, opened for trading this morning at $42.05, 10.7% above the IPO price. Subsequent trades have been lower, and the stock a few minutes after the start of trading is a little over $40.
Some investors likely expected a higher pop in the stock, but we're still talking about a company with a market cap north of $100 billion.
Let's not be greedy.
The truth is, if the stock closes within the vicinity of $40, with a modest single-digit percentage gain, then the investment bankers will have done an excellent job of maximizing the take for Facebook here. After all, the goal is not to give a windfall to the those investors who finagled a way to get IPO shares; the goal is to provide a pile of capital for Facebook and to offer liquidity to insiders. A 1999-style pop of 50%-75%-100% or more would not have been a good sign. A steady price close to the IPO price would be a lot better for the market, even if it disappoints investors who were hoping for a quick score.
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