Facebook IPO Score: Zuckerberg 2, Wall Street 0
(MoneyWatch) Earlier today, I posted a piece arguing that the failure of Facebook's (FB) shares to pop on the first day of trading was a sign of success, in that the pricing was fair. After falling all morning, it looks like even more of a success for Facebook.
A stock has an initial public offering at a price the investment bankers think that they can sell to investors. Granted, most of the investors are really the best customers of the bankers. Initially, the price was set at $34 a share but the interest was so high, the price was raised to $38 a share and $16 billion was raised for the company.
As noon, it's looking like the $34 price was closer to fair value. This means that Facebook raised an extra $1.7 billion over its current fair price. That's a transfer of money to those who owned pre-IPO shares (Mark Zuckerberg is by far the largest) from investment bankers and their insiders who bought the new stock on Friday.
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