The Menlo Park, California based Facebook, the world’s biggest social networking company went public in May 2012 on the NASDAQ market at $38 per share after months of speculations. On the day of the release, trading of the stock was delayed more than half an hour and it took more than two hours for traders to receive confirmations, due to some computer glitches. Media dubbed the IPO as the “most embarrassing IPO”. However, some 82 million shares have been traded during the opening 30 seconds of the trade.
Facebook stayed as a private company for eight years, longer than Google and Amazon before going public. When it came to financing its grand plans, it had no other choice but to go public to raise capital for expansion. Prior to going public, many company workers received stock and going public was one way to cash in those shares and for the company to retained the talent pool in the company.
The blunder cost Morgan Stanley too, the lead underwriter of the IPO. The company stock started to fall post IPO of Facebook. It fell 21 percent just in the month of May 2012. As a result of the blunder, Morgan Stanley revised its expectations lower for the remainder of the fiscal year.