Actually I think that means it was right on target. People had expectations it would go psycho up, but that’s .com thinking, that’s two booms ago. In normal times when an IPO stays at about the price they opened at that means that the folks who set the open price got it right, you don’t normally expect them to triple in price in 2 hours like in the 90s, that was crazy time.
As Onyx posted, the underwriters had to step in to support the initial offering price of $38, or it would have tanked. Not a good sign. The $38 price was considered ‘conservative’ yesterday. By Monday it may be considered ‘speculative’.
How can anybody invest in a corporation that has no real product or service to sell, and is basically valued as the sum total of its parts, i.e., servers/real estate/office furniture? It may be a fad that people get tired of in a couple of years..........
I agree. If demand was such that the stock would have closed today at $100/share (for example) then Zuckerberg and his partners would have lost the opportunity to get that price for their shares, rather than the $38 IPO price they did get. Of course, that would have thrilled the speculators who bought it at the IPO price. Conversely, if the IPO price had been significantly higher than the collective buyers and sellers had thought it was worth, the price could have fallen well below the $38 level. Zuckerberg, et al, would have been thrilled to get top dollar for their privately held shares, but those who bought at the IPO price and took losses would be less than thrilled.
Of course, the underwriters might be long some stock now in an effort to keep that last scenario from happening. If they are supporting a stock whose value they misjudged, they could eat some heavy losses. It's called capitalism.