Facebook shares end flat on Day 1

Facebook’s long-awaited stock market debut did not live up to all the hype as the social network’s shares closed the first trading day on a flat note with technical glitches at the Nasdaq stock exchange sending confusing signals to investors.

After rising to an intra-day peak of $45 apiece, the shares ended at $38.23, up only by 0.61 per cent from the $38 offer price.

Friday began on a promising note for Mr Mark Zuckerberg and his team at Facebook as he rang Nasdaq’s opening bell amid great fanfare and cheering from the company’s Menlo Park headquarters.

Commencement of trading

All eyes were then set on Nasdaq where the shares of the company with the ticker symbol ‘FB’ were to begin trading at 11.00 pm.

Soon after the start of trading, the stock price of $38, which Facebook had set as its offering price, remained “unchanged’’. Around 11.13 pm, Nasdaq issued a system status update noting “a delay in delivering the opening print’’.

When the stock did begin trading at a little after 11.30 pm, it rose quickly to the $42.05 level, up by almost 11 per cent. During the day, Facebook stock touched a high of $45 and a low of $38.

The social networking site has a market capitalisation of $104.81 billion. However, the optimism soon faded away as the share price began falling back to the $38 level.

Facebook closed its first day of trading with a stock price of $38.23, a disappointing level for an IPO that was touted as the largest-ever by a technology firm.

About 580.59 million FB shares changed hands on Friday.

Technical glitches

The Securities and Exchange Commission said later it would review the day’s trading, which was marred by long technical glitches.

The New York Times said orders were being filled by hand at one point.

“As is our practice, staff will review the incident with Nasdaq to determine its cause and steps that will be taken to address it,” SEC said.

The New York Times said Facebook’s lead underwriter Morgan Stanley requested a delay at 11.00 pm.

Confusion ensued next as traders were informed that the company’s opening price was $42 a share. Orders failed to be executed, or in trader parlance, “print’’.

Nasdaq too was telling traders to be on stand by.

Trading details

Bad news continued to plague Facebook’s $16-billion public debut as monitors of some traders at the stock exchange froze instead of reflecting a steady stream of orders for company shares, with some reflecting conflicting information.

Nasdaq was unable to deliver trade execution messages until mid-afternoon, leaving traders in the dark about whether their orders had gone through. Some traders did not get confirmation of their bids until after 2 am.

The delay and reports that Nasdaq was encountering problems with entries and cancellations unnerved participants, said Mr Sal Arnuk, co-head of equity trading at Themis Trading.

It was then up to the lead underwriter and stabilisation agent Morgan Stanley to ensure that Facebook’s stock price did not fall below the $38 dollar, which would have been an embarrassment for the company, which was boasting of a market cap of $104 billion.

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