Facebook Inc. shares got off to a rocky start in what has been the most highly anticipated initial public offering in history.
The stock jumped more than 10% in the first few minutes of trading. But then sellers swept into the market and that gain evaporated.
“It’s a total disaster because the stock is trading right at the IPO price,” said Francis Gaskins, editor of IPOdesktop.com in Marina del Rey. “They didn’t want that in a million years. A traditional IPO is up 10% or 15%.”
The stock most recently hovered at about $40, which is only $2 above what shares were priced at late Thursday night. Shares touched that $38 level multiple times during trading.
And investors also had to contend with a nearly three-hour delay for the stock to open. The Nasdaq kept the stock halted as it processed the crush of buy and sell orders that came through in the morning.
The inauspicious opening suggests that retail investors paid close attention to reports of soft financials and big selling by insiders.
Still, Facebook raised $16 billion in what will go down as the third-largest public offering in U.S. history and the biggest ever for a technology company.
Facebook founder Mark Zuckerberg rang the Nasdaq opening bell from company headquarters in Menlo Park, Calif.
There had been hopes that Facebook’s IPO would be a shot in the arm to the broader markets. But that too appears to have fallen by the wayside.
Major U.S. stock indexes were all higher in the hours leading up to the public offering. Once Facebook shares began to weaken, however, so did the market.
The technology heavy Nasdaq fell 6.06, or 0.22%, to 2,807.70. The Dow Jones industrial average dropped 13.77, or 0.11%, to 12,428.57; and the Standard & Poor’s 500 index shed 0.69, or 0.6%, to 1,303.98.
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