Was the Facebook Deal Overhyped?
With Facebook shares trading close to their $38 offer price and revelations that retail investors got a larger-than-expected slice of the $18.4 billion IPO, market watchers are questioning whether the social network’s debut was over-hyped — not just in the media, but in the investor community.
Facebook could make or break the fragile IPO market if it does not trade well once it goes public next week, analysts say. Facebook, which plans to go public on May 18, is widely expected to price well and is targeting a high valuation of $96 billion. The company has set the price range of $28 to $35 a share, and could raise as much as $13.5 billion. However, “given the high expectations, less than spectacular Facebook debut could have negative repercussions for companies yet to IPO,” cautions Morningstar analyst James Krapfel.
One out of five hedge funds count Apple among their ten largest holdings, according to a Goldman Sachs survey of the industry.
Photo: Flickr: ping ping