FACEBOOK (FB) Damned If You Do Damned If You Don’t!

facebook

FACEBOOK (FB) Damned If You Do Damned If You Don't!

 

FB started trading a tad late this morning on some technical issues, when it did finally open the stock hit a high of $45 then fell back to the $38 IPO price. What? Not a 300% gain on its first day of trade? This is Facebook. This is the most highly anticipated IPO in recent memory. The stock will trade record volume for an IPO when all is said and done today. Why not a huge pump on this glorious day? The headlines were already calling FB a failure, the stock was PLUNGING back to its IPO price. Isn't this a good thing? If the stock gapped 200% higher many would be complaining that the market is irrational, it falls back to its IPO price and you say its plunging, falling apart? At what price would the FB IPO close at today to make it a successful day?

Investors Business Daily had a headline "FACEBOOK Faceplant" and called FB's debut lackluster. Lackluster? How is over $16 billion in money volume lackluster? Just because the stock didn't gap 200% higher doesn't mean it was a lackluster day. People are undoubtedly buying the stock, and those lucky enough to be holding shares (not anyone I know is that lucky, smart, and/or connected) are selling them. It is a stock market after all, I don't think an IPO should be judged purely on how high it trades its first day.

Facebook had the impossible task of meeting or beating enormous expectations  today.  I'm not sure I agree with everyone else in saying it was lackluster or a bust.

You have to consider the current market conditions with stocks in a sharp decline for a few weeks.  This IPO came precisely at three month lows and there are headwinds everywhere.  I think no matter what FB did today the headlines were already written weeks ago.  The anticipation, the hype, gave this IPO something it could not live up to.  Trading has been rather dull, the maximum gain thus far has been 11%.  Yes.. boring....

Everyone wanted some fireworks today.   Huge swings, big gains, big drops... but at the end of the day all everyone got was a solid performance from FB, which will be ultimately overlooked

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

Leave a Reply