With the massive Facebook (FB) IPO out of the way on Friday, investors can now get back to investing in good companies where the IPO hype is gone already.
With the business media networks spending countless hours analyzing the Facebook IPO, investors learned an important lesson about supply and demand. Facebook priced 421M shares at $38 in order to raise $16B, but the stock went virtually nowhere in after market trading.
The huge amount raised was a lot for the market to absorb and clearly the size was all that could be handled with the stock closing up only $0.23. The market should've learned this from when the opposite happened with other social networking IPOs that priced considerably less amounts of stock at the beginning of the wave. Those stocks had some significant initial pops that led to lackluster returns in the after markets.
Read the full article at Seeking Alpha.
Disclosure: No positions mentioned. Please review the disclaimer page for more details.