Was Facebook’s IPO a dud?  It didn’t double on the first day like other high-profile IPOs, and it’s currently down about 10% from the IPO price of $38.

How much does a super-strong opening really matter, in the long term?  If their stock had closed at $60 (as I had predicted), that would have meant it was underpriced, leaving money on the table for the underwriters and their clients.

Some argue that a big IPO pop is important to the continued momentum of a company, but I’m not so sure.  Most of my friends don’t know (or care) they went public.  The initial price gyrations aren’t about long-term value;  they’re about underwriters and traders jockeying their positions (e.g. propping up at $38 on Friday, and likely selling today to minimize exposure).  Apart from NASDAQ’s problems handling the trading volume, I bet this IPO will be a distant memory in a few quarters.

I think Facebook actually played it pretty well.  Maybe it was priced slightly high, but most of the proceeds went to the company (and inside sellers), not aftermarket traders, which is how it should be.  The underwriters are certainly earned their fees by providing float for the stock on Friday.

I like owning companies that play it well.

Disclosure:  I’m long FB.