Facebook underwriters prop up stock as it nears break-even mark |
| Los Angeles Times - May 18, 2012 |
The big pop in Facebook Inc. shares never came.
Buyers did not rush into the market to snap up shares of the social networker. And the big Wall Street banks that brought Facebook public scrambled to prevent the stock from collapsing into declines.
The underwriters averted a potential debacle by scooping up shares of the company during the Nasdaq debut. This propped up the stock, keeping it above the $38 offering price through most of the day.
“When a deal gets priced and breaks price on the first day, that’s definitely a major embarrassment," said trader Andrew Frankel, co-president of Stuart Frankel & Co. "But it didn’t do that here – at least for the time being.”
The practice is pretty standard during IPOs, especially high-profile ones like Facebook. The big banks buy into a wave of selling as a way to prevent their customers from suffering big losses.
Read Full Article from Los Angeles Times
- Posted: 2012-05-18 16:24:08
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