After weeks of anticipation, it was finally time Friday for Facebook Inc.'s official debut on Wall Street. After jumping more than 10 percent in the first few minutes of trading, Facebook stock, selling under the FB symbol, closed less than one percent higher.
Despite the lukewarm start, analysts say trading volumes were high. The IPO [initial public offering] was one of the biggest in history.
The year's most hotly anticipated public offering kicked off at 11 a.m, Friday in New York, with founder Mark Zuckerberg ringing the Nasdaq opening bell remotely from Facebook headquarters in Menlo Park, California.
Despite the hype and the celebratory hugs, the stock's performance on day one proved underwhelming. That came as no surprise to investment strategist Michael Gayad.
"We've actually seen a few of that type of behavior in some other tech IPOs this year where the initial excitement was high, there was a lot of buying and then it just gradually fell off," said Gayad.
After opening at $38 a share, Facebook stock closed just 23 cents higher. That's a big wake up call for a company that is now worth more than a $100 billion, said media analyst Nick Thomas.
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"Everyone loves Facebook because it's free. The big challenge for Facebook is once it has shareholders, it's going to have to try to generate serious revenue," said Thomas.
Among the doubters was automaker General Motors, which pulled its ads from Facebook, saying it didn't think the social network could deliver results.
Some analysts had been warning that Facebook was overvalued.
Jeff Corbin at KCSA Communications told VOA he had no plans to invest in Facebook.
"How do we put a value on it? Right now, it's all advertising. If the advertising industry determines that Facebook ads don't really help, then we're going, they're going to see a decrease in their revenue," he said.
But Facebook is not without its believers. Jonah Peretti, the founder of Buzzfeed.com, has encouraging words.
"It's a phenomenal company when you look at the level of engagement and there is nothing to compare to it, nothing has ever had that level of engagement before. And so I think they have a very bright future and that people haven't fully understood the impact they're going to have on the Internet and on business and on media," said Peretti.
Despite a disappointing first day, the world's largest social network - with an estimated 900 million user accounts worldwide - managed to raise more than $18 billion, making it the largest technology IPO in U.S. history.
