May 18 - Facebook closed its debut in a lackluster fashion, finishing near its initial public offering price amid technical glitches. Analysts reflect on investor interest, target prices and whether the IPO lived up to the hype. Jill Bennett reports.
TV AND WEB RESTRICTIONS~**NONE** PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Facebook, the world's dominant social network, wasn't as liked by investors as expected. In its first trading day on Wall Street shares finished at 38.23, just above its IPO price of $38. Still, the pricing values the company at more than $100 billion and Facebook set a new trading volume record for U.S. market debuts. 28-year old founder and Chief Executive Mark Zuckerberg rang the opening bell from Facebook headquarters in Menlo Park, California. But the celebrations came before the trading glitches that delayed the debut -due to the high volume of trades which drove up anxiety levels for traders and onlookers. Anupam Palit, Head of Research at Greencrest Capital: SOUNDBITE: ANUPAM PALIT, HEAD OF RESEARCH, GREENCREST CAPITAL (ENGLISH) SAYING: "It's obviously a very fast growing company. It's enormous. It's profitable. We do think it has a lot of investor merits. We are just uncomfortable with the valuation at these levels. I think once you see the stock trade off a little bit valuation come back down to earth I think you'll see a lot of institutional money pour in and it will be a core holding for many firms over the long term." Palit has a 12 month price target of $32 a share for Facebook. Wedbush Securities has a $44 one year target. And Stern Agee has a one year target of $46. There are concerns as Facebook, founded in a Harvard dorm room in 2004, sees a slowdown in its online advertising business - which accounts for the bulk of its revenue. But Michael Pachter of Wedbush says there is still a lot of potential. SOUNDBITE: MICHAEL PACHTER, RESEARCH ANALYST, WEDBUSH SECURITIES (ENGLISH) SAYING: "The way they are really going to grow is by increasing either/or the frequency of ads or the amount that they are able to charge for ads. And, I think they are going to do a combination of both. The way that they can do it is not to spam users by just slamming ads at them every five seconds. I think the way to do it is to get much better targeted ads and they can do that because they have information and make those ads so relevant that the target market is likely to act on them, which makes the advertisers willing to pay a lot." Zuckerberg, in a talk before employees, many newly minted millionaires - at least on paper- stayed on message: SOUNDBITE: MARK ZUCKERBERG, CHIEF EXECUTIVE, FACEBOOK (ENGLISH) SAYING: "This is an awesome moment. Stay focused and keep shipping." REUTERS REPORTER JILL BENNETT (ENGLISH) SAYING: While Facebook's debut didn't quite live up to the firestorm of interest...there is great expectation that investors will continue to "like" the stock as long as earnings match up to the hype. In New York I'm Reuters Reporter Jill Bennett.