BUSINESS

Facebook IPO: Stock goes on sale

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NEW YORK (AP) - After all the hype, Facebook's first day as a public company ended where it began.

Its stock closed at $38.23, up 23 cents, after pricing Thursday night at $38 per share.

After an anxiety-filled half-hour delay, its stock began trading on the Nasdaq Stock Market for the first time as investors were finally able to put a dollar value on the company that turned online social networking into a global cultural phenomenon.

The stock opened at 11:32 a.m. at $42.05, but soon dipped to $38.01. By noon, it was up again at $40.40, a 6 percent increase.

It fluttered throughout the afternoon, but it never hit the double-digit jump that many Facebook-watchers had expected.

By the end of the day, more than 500 million shares had changed hands

The closing price means Facebook is worth about $105 billion, more than Amazon.com, McDonalds and storied Silicon Valley icons Hewlett-Packard and Cisco.

But as many people looked for a big first-day pop in Facebook's share price, the single-digit increase was somewhat of a letdown.

"It wasn't quite as exciting as it could have been," said Nick Einhorn, an analyst with IPO advisory firm Renaissance Capital. "But I don't think we should view it as a failure."

Indeed, the small jump in price could be seen as an indication that Facebook and the investment banks that arranged the initial public offering priced the stock in an appropriate range.

It's also a supply and demand issue. Facebook offered nearly 20 percent of its available stock in the IPO, so there was enough to meet demand. In comparison, Google offered just 7.2 percent of its stock when it went public in 2004 - and rose 18 percent on day one.

To IPOdesktop's Francis Gaskins, it means mom-and-pop investors are becoming "much more educated and careful" about not buying into hype. And he said that the banks taking Facebook public have learned from the 10 IPOs of social media companies in the past year and are better able to gauge how much stock to make available in an initial offering.

It might not have been possible for the social network to live up to the hype that led up to its IPO. It's Facebook, after all, a place where people are emotionally invested in endless online diversions and rekindled friendships, an endless depository of baby photos, favorite songs and fleeting memories.

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