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

Why Facebook's IPO Flop Is Good News

NEW YORK ( TheStreet) -- Facebook (FB - Get Report) made a mixed market debut on Friday but it could be beneficial to the company in the long run if this pullback leads to a tempering of expectations.

A multitude of issues impacted Friday's action in the stock. The Nasdaq exchange had to delay opening the shares, and underwriters reportedly stepped in and bought the stock when it touched the IPO pricing level of $38 per share at numerous times during the session. Both of these occurrences are never a good sign but taking these kind of hits early and alleviating some of the hype around the social networking giant may ultimately be a positive.

Wedbush Securities analyst Michael Pachter believes the underwriters may have overestimated the demand for shares on Friday, by adding an additional 84 million shares to the offering. However, Pachter still believes that Facebook has "huge upside potential for revenue and earnings growth," given its size and reach in the advertising markets. Pachter rates shares of Facebook "outperform" with a $44 price target.

Facebook priced its IPO at $38, opened at $42.05, quickly jumped to $45, and settled at $38.23, up just 0.6%. The stock was diving in Monday's action, falling as low as $33. It was changing hands at $33.66, down 12%, in recent trades.

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
FB $117.52 0.68%
AAPL $93.66 -1.20%
GOOG $693.64 0.38%
TSLA $240.49 -2.90%
YHOO $36.60 0.03%


Chart of I:DJI
DOW 17,780.73 -50.03 -0.28%
S&P 500 2,063.54 -12.27 -0.59%
NASDAQ 4,772.1850 -33.1060 -0.69%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs