Facebook, Inc. (NASDAQ: FB) was trading up at the opening bell but the tape went red shortly after the opening bell. What is interesting and what matters perhaps more than anything right now is that the $31.41 close on Monday was the third day in a row with a higher close and it takes it back to where it had fallen on the seventh trading day from its IPO. Keep in mind that Facebook has previously not seen a 3-day in a row of rallying even once since its poorly handled initial public offering.
If you thought you were not adequately warned about the Facebook risks, we did give you 18 reasons to be concerned ahead of the pricing. Unfortunately, even in all of that exercise we did not think that Zuckerberg would announce his marriage and then go on a honeymoon right after. That was just a slap in the face of all shareholders and it shows why Facebook was one of our companies highlighted where shareholders have no power at all.
The quiet period is set to end in the next ten days or so and the great mystery will be just how the analysts in the underwriting syndicate will cover the company with “Buy” and “Neutral” ratings. Perhaps the greatest tell will come from Morgan Stanley (NYSE: MS) as the lead underwriter. With a $38 deal pricing, imagine if the research team at that shop valued Facebook under $38.00. If that happens it would have to be a class action lawyer’s dream come true.
Facebook is currently trading down 0.6% at $31.24 on 2.3 million shares after about eight minutes of trading. After a $38.00 IPO price, the stock’s lowest print appears to be $25.52.
This stock had been down more than 30% from the $38 initial public offering price. A 20% loss was at $30.40. Now Facebook is down by “only” less than 20%. It is amazing how the criteria of success changes under different circumstances.
JON C. OGG