|FB traded between $38 and $42 on the first day, closing at $38.23.|
The stock had been widely predicted to soar on its first day. Instead, up until the closing moments of the trading session, Facebook's underwriters battled to keep the stock from slipping below its offering price of $38 a share. Such a stumble would have been a significant embarrassment, particularly for a prominent new issue like Facebook, the most heavily traded IPO of all time.
In the end, the bankers succeeded. When trading on Nasdaq ended at 4 p.m., the social network's stock was up just a hair.The fact that Facebook didn't "pop" to $50 or higher showed that investors aren't as irrational as some underwriters had hoped. The consensus projection is that FB will earn about 50 cents per share in 2012. Growth projections being all over the map, one can easily talk oneself into chasing the stock.
Even at 50 times earnings that still puts a "fair" valuation at 50 x $.50 = $25. I'll probably pick up a few shares if Facebook drops to that level.
|FB is not feared or worshipped (yet) and is the butt of jokes (e.g., Mad),|