Facebook IPO a Complete Disaster

Facebook’s IPO — which opened a week ago — was a market embarrassment, one which almost nobody saw coming.

The initial trading was plagued by technical errors that resulted in people reporting that they received stock at higher than expected prices. And NASDAQ is still trying to sort out the debacle. With such a rocky start to things, people thought that trading would bounce back and prices would stabilize, or at least start rising. That didn’t happen.

Even after NASDAQ’s mea culpa, it’s too late for many, and some shareholders are filing a lawsuit, alleging that key data regarding Facebook’s financial outlook was leaked to select banks, like Morgan Stanley, ahead of the IPO. The company flatly denounced the suggestions.

Allegations of insider trading aside, I speculated in February, when the IPO was announced, that now was a rocky time to be doing it, but that maybe Facebook’s membership growth plateau might have something to do with the timing.

Facebook’s stock price is way, way down from the initial offering. It ended the first day of trading even with its opening. The decline started Monday and continued through Tuesday, finally starting to climb back up on Wednesday. Everyone’s still reeling from the drama that’s unfolded in what should have been an unblemished triumph for the social media giant. The employees and founder, Mark Zuckerberg, at least are enjoying counting the money they’ve made from the insanity of the initial trading, and will likely be laughing all the way to the bank.

The current volatility is making it a day-traders game, but other investors will no doubt be combing through the now public info from Facebook’s IPO filing. Who knows where the stock will end up, especially with the continued raging debate over the company’s prospects for fulfilling $100 billion worth of expectations?

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