This IPO was an alarming junction for Robert Greifeld, the chief executive of Nasdaq OMX as the volume overload caused technical glitches in the system due to which trading was delayed for 20 minutes. Therefore, for around 2 hours there was uncertainty so as to if trades were completed or yet pending. This can be a caution bell for all modern equity markets where they must be well- equipped to handle volumes of millions every second and has also put forward this as an issue to be discussed with lawmakers & regulators. With an immediate effect to this, Greifeld mentioned that NASDAQ will not accept change in orders closing minutes towards the trade. There was only millisecond systems blip which caused the delay in the trading stocks of $16 billion. According to their own rule NASDAQ was required to liquidate and generating $10million for the group according to their rules. An approval was put forward to US Securities and Exchange Commission if these funds could be used for solving the disputes related to 30 million shares that may have been withheld for trade due to the delay.
The share price did not soar to great heights as expected & the stock analysts believe this was due to the Facebook’s lack of innovation as far as exploring social media on mobile was concerned, resulting in loss of Mobile revenue. Facebook is yet to formally develop a sustainable mobile business model to put forward the social platform to the public. Alongside the Facebook IPO, other co-related players also showed a downward trend in the market by falling a 10% average like Group on, LinkedIn, Zing the maker games that are played mostly on Facebook. Another reason why it is believed that Facebook is losing out on profits is because of a very unproven advertising model. Facebook at the moment is trying to develop a module on different ways of advertisements, whether they can be adjoined while uploading photos or in any other format. Facebook has been in the run for the website with the most number of pictures as nearly 300 million photos are uploaded on facebook on a daily basis. Facebook holds a 1.5 petabytes of data which consists of more than 60bilion images. This tells us the holding capacity of the social website and the capacity it holds to form a Mobile & Advertisement revenue module in order to bounce back, resulting in a positive move in the market.
The World Social Platform “Facebook” priced its shares at $38 per share which jumped to a considerate 32% and if this upward trend continues Facebook will be worth a whooping $137 billion. Though the stock showed a downward trend after reaching $42, it closed at $38.23. The Facebook IPO is technology’s biggest initial public offering and it is one of history’s biggest IPOs as it aims to raise about 16million.
A record- breaking 570 million shares were traded for the IPO, where 30 million shares were traded in between 11.11am & 80 million shares in the first 30 seconds of trade. The heavy volume trading caused technical glitches in the NASDAQ trading system which caused a 20 minute delay and the trading actually began at 11.30am when Facebook’s lead underwriter Morgan Stanley had authorized trade to begin. The share price for this IPO was decided by a group of 33 underwriters led by JP Morgan Chase, Morgan Stanley & Goldman Sachs. Therefore, the exchange decided to print the opening trade of stocks manually but towards the end they were forced to delay individual trade.
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