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Facebook IPO

The opening was around 20 minutes late due to outsized number of parties involved in the IPO. Normally you have a few underwriters who open the stock and trading begins 0.001 second afer the open. This had allocations to a wide range of retail customers and brokerages who service retail, so the sheer number of opening orders and the sheer size of the opening float (around $16B IIRC) on a mere $38 per share IPO price. It clogged the NASDAQ system for IPO's then after the open actually happened at 42.05 there were a lack of buy and sell confirmation signals from NASDAQ and several of the other exchanges trading FB on the open of the IPO.

So it was a rocky start. The stock traded down to the IPO price several times duiring the first hour and the price was bouyed by the market makers by placing limit orders at the $38 IPO price. Near as I can tell, they only had to transact about 20m shares or so to keep the price from breaking the IPO price as of 12:45 ET.

I will attach another chart to show it bottoming out at the IPO price. You can see slight increases in volume as the MM buy from market price sellers.

I wish I could do a seminar for the hundreds of FB stockholders to suggest 5-10 really simple things they could do to reduce their risk and take advantage of their new found wealth at reduced tax burden.

If wishes were unicorns. Heck I would do it for free.

Anyhoo, it was fun to watch history being made real-time. Nothing is perfect and the FB IPO was no exception.

If you are a buyer of FB, place limit orders at around $38.50. You'll be surprised how many shares you get this week.

I also attached the 1 minute chart as of right now. IPO trades forever memorialized in public. :)
Update IPO was $18.4B.

As of 10:18 Pacific time NASDAQ still has not confirmed all the opening orders!

Don't forget to watch the eclipse this weekend if you are in the US west coast. UTC Sunday, May 20, 2012 at 01:30:00

Rocketman
 

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MacNut said:
Does this prove that the stock was over priced? It is trading even.
Click to expand...

That's because there are a ton of amateurs thinking that they were going to get it at $38 right off the bat when the market opened.

My dad was estimating that we'd be able to get it at $60 when it started trading, I was guessing around $45, every single post on about it from my friends on facebook thought they were getting in on the IPO directly at $38.

My morning was filled with facepalms.

I got a few shares for $39.83, I only plan on holding onto it for a few months and I'll take whatever profit I have and not be greedy, I don't have much faith in it for the long run.
 
Now that the 2nd day of trading is done, we see FB actually behaving like a stock, following technical signals. That said, it is probably a buy until a week or two before the next release of restricted shares. I'll attach a chart after the market closes, but reset those limit orders down to $34.10 and there should be no practical limit how many shares you can buy at that price.

This has been like watching a soap opera. :)

I am not a buyer of FB, but if I were, I would put a limit order at $25 and be patient.

Rocketman
 

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In pre-market this morning FB is down another buck to $33. We may see the stock drift down, but watch volume and consider a high volume rise a short term buy signal. I don't think a big pop is in the cards. Setting buy limits a couple of dollars below market is a good way to take advantage of very short term (< one minute) buy-sell imbalances and get a good deal.

Rocketman
 
well with the news this morning that Facebook and the banks are now being sued for (allegedly) withholding declining revenue sales forecasts, it could be very, very interesting.

Somewhere, the twins are smiling...
 
I wonder how many shares of Facebook were given away in lieu of actual cash (like to that graffiti artist for his work) and how many shares were actually purchased by people not directly associated with the company?
 
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