Facebook finishes first day of trading down $4 (£2.50) from early high

Facebook's first day of trading
Facebook broke records on its first public day

Facebook finished out its first day of public trading down by $4 (£2.50) from a strong opening around $42 (£26) to around $38 (£24) by the sound of the bell.

The cost plummeted to $38 just before noon before making a steady rise in the afternoon and eventually falling back down back to $38, the same price as the social media giant's initial IPO.

"[Today's trading] doesn't have anything to do with what the company's worth," said Wedbush analyst Michael Pachter.

Facebook's first day of public trading may have ended on a slightly sour note, but the company did manage to break at least one record: Facebook's trading volume today was the biggest for any IPO in history.

More than 460 million Facebook shares were traded today, narrowly surpassing the previous record of 458 million, reached by GM in 2010.

Facebook will find its footing in the market

Facebook amended its IPO documents earlier this month due to the fact that the company doesn't make ad revenue from mobile visitors, an increasingly significant portion of the site's users.

The question of Facebook's long-term viability has also arisen, but at least one analyst thinks those worries are unfounded.

"It'll find an equilibrium price in the next week or two, but [today's trading] doesn't have anything to do with what the company's worth," Wedbush analyst Michael Pachter told TechRadar.

"I think that the breakdown here was that they offered too many shares," Pachter said. "And actually they sent a false signal to the Street on Wednesday when they decided to offer 50 million more shares, so the implication was that there was so much demand that we actually need more stock to satisfy it. And that turned out not to be right."

"That's only an extra $2 billion [£1.2 billion]," he added. "I mean, that's just too much - $16 billion [£10 billion] was more than the market had an appetite for today."

Pachter is confident that Facebook remains a sound long-term investment.

"I have a buy rating and a $44 [£27] target, and I'm standing by it," he said. "That's a 12-month target, and that's really what I think it's worth."

Via The Wall Street Journal

Michael Rougeau

Michael Rougeau is a former freelance news writer for TechRadar. Studying at Goldsmiths, University of London, and Northeastern University, Michael has bylines at Kotaku, 1UP, G4, Complex Magazine, Digital Trends, GamesRadar, GameSpot, IFC, Animal New York, @Gamer, Inside the Magic, Comic Book Resources, Zap2It, TabTimes, GameZone, Cheat Code Central, Gameshark, Gameranx, The Industry, Debonair Mag, Kombo, and others.

Micheal also spent time as the Games Editor for Playboy.com, and was the managing editor at GameSpot before becoming an Animal Care Manager for Wags and Walks.