After some hiccups, Facebook shares hit the market late this morning priced at $38, the high end of their target range.  According to the WSJ's Deal Journal, "given the hype and demand the question has largely been “How big a pop is coming?” not “Will there be a pop?”  For the record, two weeks ago I asked if there'd be a pop, and I'm still wondering. 

Facebook shares opened at  $42.05 and "then instantaneously hit $42.99, up 13% from its IPO pricing."  But when I left for lunch shares were trading at a meager $39 and some change--more a bump than a pop.  Now (1:30 EST) they're around $40, and they may well end up by close of business.  Still, early reports characterize the IPO as "more whimper than bang", "fizzling", and "cool."  Underwriters have reportedly been buying to prop up the price.  

I observed regarding the Carlyle IPO "No first day pop means you didn't leave any money on the table. And that's a good thing, right?  But that's not how it's playing in the press."  A similar story seems to be unfolding with Facebook.  Which leaves me with these unconnected thoughts:

1. Facebook's shares traded heavily on the private secondary markets, about which I've had much to say.  Given those trades, there's more information about what Facebook shares are actually worth.  Ergo, more accurate pricing.  Ergo, less pop.

2. To the extent that the conventional wisdom is that the first-day pop is about branding, name recognition, and reputation building--um, Facebook doesn't need that.  This IPO has dominated the business news.  Facebook is the highest valued U.S. company ever at IPO, its $104 billion valuation dwarfing UPS's $60 billion in 1999.  Pop, schmop.

3. There were some investors that were too late to the SharesPost/SecondMarket party.  The last private auction sold Facebook at $44/share.  Those buyers would have been better off waiting for the public sale with the rest of us.  How unhappy are they?  And...will they sue?

4. Zuckerberg, Goldman Sachs, and the other early investors who are cashing out don't really give a damn about a first day pop.  So what if the IPO investors don't see an immediate return?  Zuckerberg & Co. maximized their first-day take by pricing the shares accurately, and they're laughing all the way to the bank.

Update:  FB closed up 23 cents. So no pop to speak of. 

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