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Facebook shares drop below flotation price

Written By THA on Monday, 21 May 2012 | 17:14

Facebook shares ended almost unchanged after their first day of trading on Friday

Shares in Facebook have fallen in early trading on Wall Street to below the price at which they were floated.

Despite the wider market in buoyant mood, Facebook slid 12% immediately at the opening bell and were still 11% down at $33.92 more than one hour into the trading day.

Facebook's flotation on Friday at $38 a share was delayed by technical problems on the Nasdaq stock exchange.

Nasdaq boss Robert Greifeld said he was "humbly embarrassed" by the glitch.

Trading was delayed by 30 minutes due to late order cancellations, and the shares closed on Friday at $38.23, having hit $45 earlier in the day.

The offer price valued the site at $104bn (£66bn).

Disappointing
"This was not our finest hour," said Mr Greifeld. As a result of the glitch, a number of investors were unsure whether their buy and sell orders had actually gone through.

However, Mr Greifeld said that once the glitch had been fixed, trading had been "successful".

More than 566 million shares in the company changed hands, a record volume for US market debuts.

Some analysts suggested the share price would have fallen on Friday had it not been for underwriters stepping in to buy up stock.

Strong demand in the run-up to the flotation had led the company to increase both the price and the number of shares available for sale.

Other internet companies have had mixed experiences recently when they have started selling shares.

Online games maker Zynga's shares fell 5% on their first day of trading in December 2011. However, shares in business networking site LinkedIn more than doubled on their debut in May last year, while Groupon shares jumped 30% on their debut in November. (bbc.co.uk)
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