All Eyes on Facebook's Stock Monday After a Fascinating IPO

By Alexis C. Madrigal

After a weird IPO, no one knows exactly what's going to happen with the social media's shares on its first full day of trading.

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Just when you thought absolutely nothing interesting could happen on Friday, when Facebook debuted on NASDAQ, something did: the company's bankers really did set the price of the offering as high as the market would bear. That is to say, when the shares made it out to the open market, they didn't immediately spike as has happened with so many other tech IPOs like LinkedIn's last year. Some have argued that's a good thing, others that it wasn't.

Regardless, as Friday's trading drew to a close, Facebook's underwriters (namely, Morgan Stanley and the consortium of banks the company put together) propped up Facebook's share price at $38. They just would not let the company's share price fall below where they priced it. If you want to see a detailed blow-by-blow of how it worked, check out this rather stunning video recap. Meanwhile, other social media companies' shares tanked for reasons that are not quite clear.

In any case, no one expects those underwriters to keep up that kind of buying. So, Facebook will have to stand on its own. The big surprise, it seems, was that Regular Joe investors seemed unimpressed with the company's offering. Most industry watchers expected the stock to pop because they figured retail investors would herd into the shares. For whatever reason, those regular people didn't on Friday. Now everyone is waiting for the opening bell to find out if they will be more interested now that the hype of the IPO is over. I know better than to offer a prediction.


This article available online at:

http://www.theatlantic.com/technology/archive/2012/05/all-eyes-on-facebooks-stock-monday-after-a-fascinating-ipo/257435/