Facebook Ends Its First Day Of Trading With A Whimper.

Despite all the hype surrounding Facebook’s highly anticipated IPO the shares did nothing today. 

Because of demand, Facebook was able to not only increase the size of their offering but also their target range.  Yesterday, the shares were priced at the upper end of that range being priced at $38.00. 

Shares were to start trading this morning at 11:00pm ET, but the opening was delayed due to an imbalance in orders, delaying the opening a half hour.  Share eventually opened at $42.05, jumping to a high of $45.00 and then they began selling off. 

Shares ended up closing today just fractionally higher at $38.27 +0.27 (0.71%) disappointing many retail investors that purchased the company at the open.  567.11 million shares traded hands today.

Once the darling of Wall Street, now some are questioning the earning potential of the company going forward.  Some are saying the given the current valuation the company could be more than 40% overvalued and could drop into the high $20’s to low $30’s over the next few months. 

In 21 days more financials about the company will be released and in 91 days the lockup period is over allowing pre-IPO shareholders to sell their shares.  The purpose of a lockup period is to limit the downside pressure on the share price in the open market that would come if a lot of pre-IPO investors dumped their shares on the market all at once. Once the lockup period is over and pre-IPO shareholders can sell, downward pressure on the shares could increase dramatically.

Only time will tell what happens to the share price of Facebook, but for now I am content with just posting on FB and not owning the shares. After Hours: 38.19 -0.08 (-0.21%)