The first day of trading for shares of Facebook didn’t go well, with the stock struggling to stay above it’s IPO price of $38. Earlier in the week, buzz about the Facebook IPO led the company to increase its target price from $28-35 up to $34-$38. The company also increased the number of available shares ahead of the launch by 25%. Now it seems that may have been a bit of a stretch.
The stock opened strong at $42; however, the price collapsed in the first 30 minutes of trading back to around $38. At this point, IPO underwriters began buying shares to keep the price above the target. This worked, but by close of trading the stock had sunk back to $38 despite the infusion of cash.
The volume of trading in Facebook was massive. With over 460 million shares traded, Facebook now holds the IPO trade volume record. GM was the previous record-holder with 458 million shares traded during its November, 2010 IPO (after bankruptcy).
There were reports that some traders were having trouble changing or canceling orders. The Wall Street Journal cites some traders speculating that this may have actually thrown a wet blanket on demand as some orders took over an hour to be confirmed by NASDAQ.
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