The Affect of Facebook on the Stock Exchange

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NEW YORK (Reuters) - Newly issued shares in Facebook Inc (FB.O) may have a hard time in the coming week if lead underwriter Morgan Stanley stops supporting the stock and managers lower down in the IPO book who were hoping for an early surge decide to get out before going underwater. Facebook on Friday sold 421 million shares of stock in a deal that valued the company at more than $100 billion. But investors, expecting a first-day pop in price, instead saw it close just 0.6 percent above the IPO price at $38.23. As the underwriter, Morgan Stanley (NYS:MS - News) stepped in to support Facebook 's stock when it fell toward its $38 IPO price shortly after it opened, a source familiar with the matter told Reuters. The shares spent much of…show more content…
"How could it be a hot deal if all the usual mutual fund suspects already own some going into the IPO?" he added. The classic move by an underwriter to stop an IPO from "breaking issue" worked, if only barely. Given the technical issues that plagued Nasdaq, with the stock opening about 30 minutes late and delays in receiving order confirmations continuing throughout the session, it is also hard to know how much Friday 's action reflected reality. "You really don 't know how that left people, whether there were sellers who put in limits that weren 't executed," said Rick Meckler, president of investment firm LibertyView Capital Management, a hedge fund with $1.3 billion in assets. "I don 't know if people stepped away at some point because they just couldn 't execute in a clear manner, and that Monday we will have some follow through of people that weren 't executed and still need to sell." It 's retail investors who stand to get hit the most if trades aren 't executed properly, said Tim Pollock, professor of management and organization at the Pennsylvania State University. "This is a situation where small investors are more likely to be affected because of the sizes of the orders they 're putting in," he said. "If Fidelity is saying they want to buy two million shares that 's going to take priority over the smaller trades. As a regular retail investor placing orders through TD Ameritrade or Schwab you 're at the back of the
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