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Ahead of the Bell: Facebook below IPO price
NEW YORK (AP) - Facebook Inc. stock has dropped below the initial public stock offering price in premarket trading Monday, an inauspicious start to the company’s first full week of trading after its market debut Friday suffered some hiccups.
Facebook, one of the most anticipated initial public offerings in Wall Street history, ended its first day of trading Friday at $38.23 _ 23 cents above where it priced Thursday night _ when many investors had hoped for a big first-day pop. And on Monday, the stock gave up $1.13, or 3 percent, to $37.10 in electronic trading before the market open.
There had been issues with trading of the social network’s stock on Friday. Shares opened half an hour later than expected on the Nasdaq, and some investors didn’t learn for hours whether their orders went through or not. The Securities & Exchange Commission is now investigating problems traders encountered in changing and canceling their orders.
Facebook’s tepid gain came while shares of other social-media companies tumbled Friday. Facebook is now a bellwether for a range of Internet companies that have gone public over the past year, including Zynga Inc., which makes games including FarmVille and Mafia Wars; professional network LinkedIn Corp.; and local business reviews website Yelp Inc.
Still, the first day of trading marked Facebook as a major presence on U.S. stock markets. At the close Friday, the market value of the world’s biggest social network was about $105 billion, more than Amazon.com, McDonald’s Corp. and Silicon Valley icons Hewlett-Packard Co. and Cisco Systems Inc.
Some analysts see strong potential ahead, which could support the shares this week. Herman Leung of Susquehanna Financial Group started coverage of the Menlo Park, Calif., company on Monday with a “Positive” rating and $48 price target. That means he’s forecasting the stock to gain about 26 percent from Friday’s close.
Leung said that he expects Facebook to make more money from advertisers and marketing companies as its popularity increases in new geographic markets and it improves its platform for advertisers.
By Mangosuthu Buthelezi
Memories of a long brotherhood tempered in common struggle
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