As Facebook fights back – at least in terms of stalling its sagging share price – controversy continues to rage as to who is to blame for the inept IPO. On June 15, a month after the IPO date, Facebook shares languished 20% below their offering price of $38. Many are fingering the stock exchange, Nasdaq, as culprit in chief. For all that Nasdaq chief Bob Greifeld has come out since with his own mea culpa, saying he and his colleagues "owe the industry an apology", I am not so sure.
Sure, the fact that trading started half an hour late and that orders could not be confirmed for another two hours was problematic.
But was this enough to poison the whole offering? After all, the deal closed at the end of the first day around the $38 issue price. Facebook shares then plummeted over the next few days as investors started to question the ridiculously high valuation – 75 times estimated 2012 earnings – and the ability of the company to grow revenues from its vast user base.
Often, when a deal has a shaky start, it fails to flourish in the next few weeks.