Why Facebook Didn’t Perform As Expected

    May 18, 2012
    Shawn Hess
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Despite having the largest retail demand of any IPO in history, this morning’s much anticipated Facebook IPO debuted with less than stellar performance. While some experts expected stock prices to shoot over $70 per share, it only enjoyed a short period at about $45 after which it returned to its pre-negotiated $38 per share price.

Business Insider is reporting on a source close to the issue that told them there was some sort of communication breakdown early on that even delayed the start of sales. Apparently, Nasdaq was prevented from informing big bank trading desks that sales even went through or at what price. This confusion combined with a huge amount of shares on hand left very little room for demand and caused selling to stall out prematurely.

Who knows what will happen with Facebook IPO after today, or even later today, but it is highly possible that this mornings events aren’t an indicator of anything. After all, we really haven’t seen a company like Facebook go public before. Facebook has become more than just a networking site, it is a cultural institution.

We will be watching the Wall Street and Facebook as the day progresses and you can check back here for regular IPO updates. In the meantime you can checkout this daily chart from Business Insider. It features all of Facebook’s current shareholders and how much of the social giant they control.

  • Watching the Wheels

    Maybe people are NOT as impressed with Facebook as their private investor’s hype would lead people to believe.

  • http://talkic.com David

    maybe it underperformed because the general public (unlike all the “experts”) were able to see past the media fed hype. 25x earnings? Please.

  • http://www.jkershaw.info James Kershaw

    I used to use facebook and now I really can’t see what all the halla baloo is about. Is it that difficult to pick up the phone and talk privately with someone? Are people that lazy they can’t even write a simple email anymore? There is no end to what can be concocted for some nonsensical fad.

  • http://Www.SiliconValleyRealEstate.com Jt

    It will be up to Facebook to grow their revenues and keep monetizing their user base, hopefully they are able to keep up their growth.

  • http://www.seonorthamerica.com Tom Aikins

    The only way for Facebook to keep growing their revenue is if they keep changing from what they originally started out as. Zuckerberg never wanted advertising on Facebook. Now that’s the only source of revenue. How is this going to play out? What will they do if people decide they don’t like more of an advertising presence on the site? I think anyone who bought stock is going to end being a sucker.