(By Mani) Shares of Facebook, Inc.
(NASDAQ:FB) rose as much as 13 percent on its trading debut after opening at $42 as investors seemed desperate to get a slice of the social networking giant. However, the shares cooled down and fell back to the IPO price of $38.
Earlier, optimistic investors flocked to the shares of Facebook despite advisors' caution that the share price may witness extreme volatility on its debut day. Trading was scheduled to begin at 11 ET, but was delayed by 30 minutes as traders had trouble changing or canceling orders, according to the Wall Street Journal.
Shares are, however, expected to end the day higher if past performance is any indication. Facebook is the 18th IPO worldwide this year to have priced above initial expectations, and the shares of all 17 previous global IPOs that have priced above range have gone on to make first-day gains, according to data from Dealogic.
The company's CEO Mark Zuckerberg rang the opening bell from Facebook's headquarters in Menlo Park, California amid cheering supporters and employees.
Yesterday, Facebook priced its IPO at $38, the high end of its proposed range, and the company along with its shareholders have raised $16 billion. The IPO values the social networking giant at about $105 billion.
421.2 million shares were sold in the IPO, up from its original size of 337.4 million shares. Facebook, which is cofounded by Mark Zuckerberg in his Harvard dorm room, offered 180 million shares of Class A common stock, while selling stockholders sold the remaining 241.23 million shares of Class A common stock.
The IPO, including over allotments, is worth $18.4 billion, lower than $19.65 billion raised by Visa, Inc. (NYSE: V), but marginally higher than $18.14 billion raised by General Motors Co. (NYSE:GM) in November 2010, according to data from Dealogic.