That’s the term I heard all day yesterday. I would not call what happened a fizzle. I’d call it very accurate pricing by the underwriters.
(C/net) — There was no 1999-style pop, but the stock did climb. In fact, it opened at just above $42 dollars — 11 percent above the offering price of $38 a share. That’s how much demand there was. In fact, the trading volume set an all-time record for the Nasdaq. But this demand didn’t want to stick around. These weren’t bets on Facebook’s grand future. These were attempts to make a quick buck.And when the shares started to fall towards the offering price, it seems the bankers worked like mad to try to “support the deal.” In other words, the investment bankers — who have an agreement to make a market in the stock — likely began buying shares themselves to keep it afloat.
And it makes sense. The bankers don’t want to see it close below the offering price. The stock closed at $38.27 — below where it opened, and just above the offering price. For the bankers, this was not casual Friday.
I saw that half a billion shares traded. Some of the stock is placed institutionally, to help stabilize the price. Depending on how much that was, the entire retail float may have traded more than once yesterday and the stock still held up. Very accurate pricing indeed.