The social giant ends its first day trading at $38.37, up by 0.37 (0.97%) – almost the actual price the company sets, making the company total valuation to $104 billion with an $18.4 billion initial public offering. Facebook starts its first day of trading with $42.12 per share price, up 4 points (10.23%), with later half did the trading at $38 and it remains stable most of the day.
But what Reuters is reporting that Facebook may have to go through a hard time in the coming weeks if its lead underwriter Morgan Stanley does not support the social giant stock and managers lower down in the IPO book. Morgan Stanley as the underwriter comes forward and support Facebook’s stock when it fell toward its $38 IPO price shortly after it opened.
According to an analyst, although underwriter support is required but it will not support the stock indefinitely and once that firepower is gone, funds that received IPO stock looking for a bounce may decide to bail as well.
“It is very likely to dip under $38, particularly if overall market conditions deteriorate,” said Mohannad Aama, managing director at Beam Capital Management in New York. “Morgan Stanley will continue to defend the $38 price, but that support is not endless.”