Shares of Facebook were supposed to start trading at 11:05 am today, but NASDAQ delayed that, and speculation is that heavy volume and too many sellers has prevented an actual start to open trading.
Several pairs of buyers and sellers were reportedly matched at $45, quickly dipping down to $42, which is about 10 percent over the strike price of $38 established in yesterday's IPO. The goal of the bankers who underwrite public offerings is to produce a healthy bump in price for their top clients to profit on while not leaving too much money on the table for the company selling shares. An opening of $42 achieves both those results.
IPOs are an insider’s game. Buying the stock today means paying a premium to the founders, early investors, bankers, and even the bankers best clients, all of who have passed the stock down the food chain and taken their bite along the way. It remains to be seen if Facebook can live up to its $104 billion valuation. We'll be updating live throughout the day and answering your questions as well.
Update: And that's it for day one, with Facebook's price leveling back to $38.37.