May 18 -Shares of Facebook jumped as high as 18 percent in opening trade after raising more than $16 billion in one of the biggest U.S. initial public offerings. Conway G. Gittens reports.
$42.05 a share - that's the opening trade for one of the hottest debuts in stock market history. 82 million shares traded hands in the first 30 seconds, following the biggest tech IPO in U.S. history, which priced at $38 a share the night before. There was much celebration at Facebook's Menlo Park, California headquarters as CEO Mark Zuckerberg marked the first day of trade. But when the euphoria fades, do recent hot hi-tech IPOs hold their weight? LinkedIn, considered the closest in terms of business model, priced at $45, more than doubled on its first day and is now trading more than 130 percent above its IPO. But music company Pandora has lost 37 percent of its IPO value. Online games developer Zynga is now 20 percent below the IPO. But the biggest disappointment is Groupon. Its shares are down 40 percent from its IPO. Anupam Palit of Greencrest Capital: SOUNDBITE: ANUPAM PALIT, HEAD OF RESEARCH, GREENCREST CAPITAL (ENGLISH) SAYING: "I think the Internet and the tech sector in general has always been a space that is over hyped. One thing that contributes to it is because these are social media stocks, social network stocks; they are well understood by their users in terms of the name brand. So a company that may be very deep in tech, in a different industry, may not have a lot of name recognition but a name like Facebook everybody knows it. Everybody wants to be a part of it." And that high interest is playing out as shares of Facebook bounce between 38 and 45 dollars a shares within the first hours of trade. Conway Gittens, Reuters