What a week for Facebook, what a week for Wall Street, what a week for Nasdaq and most important, what a week for the people that chose to invest in Facebook went the company went public on May 18, 2012. The Silverback Marketing Round-up for May 14-May 18, 2012 discussed the problems Facebook encountered during the initial day of trading a week ago today.
There has been some positive movement in the price of a Facebook share with the price increasing Wednesday and Thursday of this week to a Thursday price of $33.03. A rise of $1.03 is nothing to snicker at, but the fact the original IPO for Facebook was $38.00 means the Thursday price is still down by approximately 13%. That is a figure no one can be happy about, especially for the investors that figured investing in the social medium would generate a huge return.
The impact is staggering when you consider that four of the top market makers in regards to the Facebook IPO, Citadel Securities, Citi’s Automated Trading Desk, Knight Capital and UBS AG may have collectively lost as much as $100 million from this deal. There were several issues that plagued the initial offering on Friday May 18, including the stock opening for trade thirty minutes late. Nasdaq has the Facebook listing right now but after all the problems that have plagued the stock Nasdaq could stand to lose the listing.
It appears that the U.S. Securities and Exchange Commission and the U.S. Senate Banking Committee are two organizations that plan to investigate the manner in which the Facebook IPO was handled. Brokers such as Morgan Stanley and Fidelity are still working with their clients to try and get them compensated appropriately. Investors are obviously hopeful that this matter can be rectified quickly but more than likely this could be a very long, drawn-out process. Time will tell if the Facebook price ever rebounds well and whether or not what happened when Facebook went public will affect the number of online users of the social network.
Have a great Memorial Day weekend!
Forbes – Bill Conerly – Facebook IPO Not a Flop
Reuters – Jessica Toonkel and John McCrank – Facebook market makers’ losses total at least $100 million
Search Engine Journal – Todd Bailey – The IPO Has Passed-Facebook Needs to Mobilize Toward the Future
USA Today Money – Matt Krantz – Facebook: A lesson in IPO investing
Washington Post Business – Eric Engleman and Jonathan D. Salant – Facebook IPO scrutiny forces its Washington lobbyists to play defense