Facebook shares start trading with modest gains

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Facebook CEO Mark Zuckerberg rings the Nasdaq's opening bell from Menlo Park, Calif.

By Roland Jones

Updated at 4:00 p.m. ET: After jumping more than 10 percent at the start of trading, shares of Facebook pulled back in their market debut Friday, suggesting a cooler-than-expected reception for one of the most watched initial public offerings of stock of recent years.
Facebook’s stock jumped to $43 in initial trading, up about 13 percent from an IPO price of $38. But the stock quickly gave back some of its initial jump and fell as low as $38 in their first half hour of trading, at which point IPO underwriters stepped in to support its price, according to reports. Facebook’s share price eventually closed at just above $38.
The broader stock market was lower Friday, with social media stocks among the day’s biggest losers. Shares of LinkedIn, Pandora and Groupon were all lower.
Facebook’s opening trade was delayed. Its stock was originally due to begin trading on the Nasdaq stock market at 11 a.m. ET, but was delayed by about 30 minutes as traders experienced problems with changing and canceling orders they had submitted to the Nasdaq, The Wall Street Journal reported.
Despite the technical difficulties, retail demand for the Facebook offering was very strong, traders told CNBC, with an expected retail component of 15 percent to 25 percent. Trading volume in Facebook exceeded 100 million shares in the first three minutes of the stock’s trading, the Journal said.
Facebook’s market reception was unusual. Other recent big Internet IPOs have seen strong starts, including LinkedIn, which went public almost exactly a year ago at $45 a share and closed at $94 on a volatile first day of trading that saw its shares top $122 at one point.
Related: Want a piece of Facebook? Here's what you need to know
That means investors lucky enough to get in at the offering price were able to book an immediate paper profit of more than 100 percent or "flip" shares and cash in. Other investors paid as much as $122 a share for LinkedIn that day and were left with paper losses. (LinkedIn shares currently trade for about $100.)
Groupon, another recent Internet IPO, leaped 27 percent on its opening day.

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