Facebook shares back up after rocky morning
By Hayley Tsukayama,
After a rocky morning start, Facebook was back to trading well over its opening price of $38, at around $41 by 1:30 p.m. Friday.
The company’s shares had spiked when it began trading at 11:30 a.m., but fell back to the company’s initial public offering price around noon. Investors drove the stock price up as much as 13 percent at the open, as Facebook debuted in what was a highly anticipated stock offering on the Nasdaq index.
Financial pundits were sharply divided over whether the stock was a good buy, underscoring the debate over the value of social media and whether companies can make money off these enterprises.Volatility in the shares Friday may be a sign of that uncertainty. Others have said that technical difficulties with the Nasdaq may have led to the mid-morning drop.
The company’s chief executive, Mark Zuckerberg, rang the opening bell for the Nasdaq index Friday morning when the markets opened at 9:30 a.m. But as the expected 11 a.m. deadline for trading to begin ticked by, trades had yet to be listed, and the Nasdaq said that it was experiencing “delays.” Trading finally began 30 minutes after the scheduled time.
A Nasdaq spokesman was not immediately available to comment on the reason behind the delay.
The first-day pop on Facebook was expected, as investors scramble to get a piece of the wildly hyped IPO. The stock hit as high as $43 per share.
Despite questions about how the company will manage to maintain and increase its revenue, investors are clearly interested in the trove of personal data that Facebook, and so far only Facebook, has to offer. And it’s that information — your information — that’s the bedrock of the company’s business model.
As the company looks to the future, it’s trying to encourage its users to bring more information into the network through its app partnerships, and it’s moving its platform to integrate with other Web sites.
By being able to promise companies a rich collection of data on what consumers tell the network they like and want to buy and how they feel about products and more, Facebook executives think they’re making a compelling advertising pitch.
(Washington Post Co. Chairman Donald E. Graham is a member of Facebook's board.)